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Shale Gas: Indian and Global Scenario

Shale Gas is one of the latest discoveries in the international energy sector. If we consider the present scenario, the worldwide demand for the unconventional sources of energy is hastily growing. But the study indicates that there’s a massive gap between the supply and demand of these energies.

The reason for the same is that the existing reserves of energy have higher depletion rates and are less in comparison with their discoveries. Hence, the increasing demand for the supply of unconventional sources of energy has incited the world to discover and develop more unconventional sources of energy.

Thus, through this blog, we aim at presenting the actual existence and various significances of Shale Gas in India as well as around the Globe. 

Let us first discover the market size and understand this natural gas in brief.

Market Overview of Shale Gas

As per the recent study, the Shale Gas Market could hit $184 billion by the year 2021. Furthermore, the projection of growth rate at a Compound Annual Growth Rate (CAGR) for 14.4% is expected between 2015 and 2022.

Moreover, the increasing demand for natural gas in India has touched the rate of 20% per year. In turn, this costs the economy of India with an import bill of approx. $ 120 billion annually.

Key Market Benefits Shale Gas (SG) Market:

• The estimations regarding the shale gas market are created on the current and current trends analysis and future shale gas market projections for the period of 2014-2020 based on the volume and value.
• The report consists of the complete study of the regional market size of the shale gases.
• The competitive intelligence of distributors of graphene and leading manufacturers aid in grasping the competitive overview across geographies.
• According to the quantitative analysis of the gas for the period 2014-2020, it is believed that stakeholders could capitalize on the latent market opportunities in the market share.
• The significant performers of the SG market analysis have been profiled. Furthermore, their growth tactics are analyzed to understand the competitive view of the market.  

Key Market Categorization of Shale Gas

We will discuss the segmentation of the world Shale Gases into two ways:

• World SG Market ‐ By End-User
  • Industrial
  • Commercial
  • Residential
  • Transportation
  • Power generation
  • Others

• World SG Market – By Geography
  • North America
  • Asia-Pacific
  • LAMEA
  • Europe

What is Shale Gas?

It is defined as the natural gas available on the organic matters in the absorbed form. It is present within fracture, cracks, and pores of the shale rock.

In comparison to other rocks, Shale could accumulate an excess of organic materials. Besides, these are deposited under marine, fluvial, and lacustrine environments. Furthermore, if we talk about the origin of the shale gas, it is thermogenic.

Characteristics of Shale Gas

Shale Gas is a promising unconventional resource of energy which ranges from organic-rich to fine-grained rocks. Apart from this, there are multiple features of this natural gas which has a whopping demand worldwide.

Characteristics of this gas are as follows:

• The Shale of gas has low matrix permeability.
• Because of the high upfront costs, the extraction of this gas is quite expensive and difficult.
• Unlike other natural gas, it is found at almost 2000 to 5000 meters below the surface of the earth.
• The technique for producing this natural gas is known as Fracking or Hydraulic Fracturing. It requires both vertical as well as horizontal drilling.
• One of the best features of producing this gas is that the combustion emits lower levels of key pollutants as compared to combustion of oil and coals. These pollutants include nitrogen oxide, sulphur dioxide, and carbon dioxide.

Shale Gas Scenario around the Globe

According to the recent study by Energy Information Administration (EIA) presented that 41 countries in the world have a total of 95 shale gas basins.

Some of them include India, Australia, Mexico, Canada, China, etc.  But it’s the USA which has exploited and explored the gas effectively. Furthermore, it has started generating revenues at quite a large extent.

However, India has not exploited this unconventional energy resource. But the Government of India is looking into the matter of carrying out the detailed exploration of the gas.

European countries too haven’t started the process of exploration and exploitation yet. The reason for the same is that the exploitation of gas will result in water scarcity. However, Canada has started the process and received outstanding success.

Indian Shale Gas Scenario

India is a huge reservoir of shale gases and has shale rock deposits across the Gangetic plain, Rajasthan, Gujarat, Assam, and many coastal areas.

India has several basins with organic-rich shales, mainly the Krishna Godavari, Cauvery, Cambay, and Damodar Valley basins. There are few other potential reserves like the Upper Assam, Pranhita-Godavari, Vindhyan, and South Rewa.

Let’s discuss the basins which consist of shale gases. They are as follows:

Cambay Basin

• The Cambay Basin is located in Gujarat and covers an onshore area of about 20,000 sq. mtrs. It is covered by basin-margin faults on its eastern and western sides.
• The basin is an extended, intra-cratonic rift basin (graben) of Late Cretaceous to Tertiary.
• Furthermore, the basin comprises five different fault blocks, from north to south:
• Sanchor Patan (too Shallow for Shale Gas)
• Mehsana-Ahmadabad (prospective area)
• Tarapur (one prospective area)
• Broach (prospective area)
• Narmada (insufficient data)

Every block is classified by local lows among which a few have sufficient thermal maturity to be likely for shale gas.

Krishna Godavari Basin

• The Godavari Basin is situated in the eastern India and extended over 7,800 mtr. sq.
• The basin contains a chain of horsts and grabens.
• The Krishna Godavari basin consists of a series of organically rich shales, consisting of the deeper Permian Kommugudem Shale (it’s gas prone Type III organics) which appears in the gas window in the basin’s grabens.
• The shallower Paleocene, upper Cretaceous Raghavapuram Shale, and Eocene shales are present in the oil window.

Cauvery Basin

• Situated on the east coast of India, the basin covers approx. 9,100 m²areas in the onshore and an offshore area of 9,000 m².
• The basin consists of several rifted grabens and numerous horsts including a thick interval of organic rich source rocks.
• These rocks are present in lower Cretaceous Andimadam & Sattapadi shale formations.
• The basin consists of total area of 1005 m² with an average resource concentration of 143 Bcf/m². Among these, the risked shale-gas is estimated to be 43Tcf of which 9 Tcf is expected technically recoverable.

Damodar Valley Basin

• It’s a section of a group of basins collectively named as the “Gondwanas”, which comprises of the Satpura, Son-Mahanadi, Pranhita-Godavari, and Damodar Basins.
• The Damodar Valley Basin along with the Cambay Basin is an essential basin for shale gas exploration by the Government of India.
• The Indian ONGC, in late September 2010, discovered the nation’s first shale gas well in the Raniganj sub-basin.
• After the completion of well in mid-January 2011, the authority found gas flowing from the Barren Measures Shale at approx. 5,600 ft.

Other Basins in India

Apart from the above-described sources, there are some other basins as well that contains shale rocks. They are as follows:

• Upper Assam Basin
  • It’s one of the most critical petroleum regions in northeast India.
  • In the lower source rocks, the TOC (Total Organic Carbon) content ranges from 1 to 2% and extends to 10% in the Barail Group.
  • For the Kopili formations, the vitrinite reflectance varies from 0.5 to 0.7% and for the Barail group from 0.45 to 0.7%. 

• Vindhyan Basin
  • It is situated in the north of central India and consists of a chain of Proterozoic-age shales.
  • The total organic carbon ranges from 0.5 to 3.8%.
  • Sandstone, limestone, and shale are deposited in the marine environment.
  • Pulkovar shales seem to contain some organic-rich matter.

• Rajasthan Basin
  • It covers a large area of northwest India.
  • The structure of the basin is quite complicated and characterized by small fault blocks.
  • The Permian-age Karampur Formation is the critical source of shale rock.

Challenges in the Production of Shale Gas

Considering the unexpected success of the USA and Canada, many companies in Asia and the Middle East who operate in the upstream gas industry are keen to work on the production of Shale Gas. Obtaining gas from rocks with permeability in nanodarcies seems quite miraculous.

Therefore, companies that are operating in the places of this gas reserves are ready to start the gas extraction process. However, there exist some non-technical challenges which restrict them to extract gas from these specific areas.

Some of the serious concern that companies follow are:

Higher cost of field development operations

When compared to the USA and Canada, the cost of drilling and completing are 2.5 to 5 times higher in Asian countries. This problem could be due to lack of government support (as subsidies) and concerned infrastructure in the country.

Incompetence to experiment with wellbores

In western countries, reservoirs and wells are made with the need to analyse- using the process of trial and error. However, in Asian countries, companies find difficulty in grasping this concept. In such countries, companies apply much of the engineering perspective based on the actual performance of wellbore instead of upfront before drilling the well.

Lack of political will

The political condition of every country affects its development and has a direct impact on every activity going to be started. With considerable political differences amongst many countries in Asia and the Middle East, most of them have been found in war with each other.

Besides this, political instability, bureaucracy, corruption, and restrictive customs regulations all affect the operation of gas extraction.

Shortage of infrastructure and fiscal incentives

In countries like the USA and Canada, they offer budgetary incentives and have an excellent infrastructure available for the process. But other countries lack here and don’t provide any significant fiscal incentives.

Competition with alternative sources

Companies have to face huge competition with several existing products in the market and also because of the monopoly of gas-rich countries.

Lack of wellbore-specific details

In the USA, it is mandatory to disclose the significant and substantial information for every drilled wellbore. Furthermore, this information is available for everybody on the public-access database. Therefore, operators can compare practices and completion methods for numerous wells in similar formations.

However, in Asian countries, there is a lack of shared information,which makes it daunting for operators to exploit energy resources.

Scarcity of Water

It’s one of the biggest challenges faced by the countries. In the process of gas extraction, a tremendous amount of chemically-treated water is required to create fractures in the shale rocks. As a result, it creates water scarcity in the region. Hence, many countries are not allowing companies to start the extraction process.

Developments in India w.r.t Shale Gas

• In November 2010, both the countries, the USA and India agreed to cooperate on the grounds of shale gas and clean tech.
• The Petroleum Ministry and Director General of hydrocarbons are together working on the changes required to explore laws for Shale Gas production since the current licenses for gas exploration don’t include unconventional sources.
• In January 2011, Oil and Natural Gas Corporation (ONGC), India’s biggest explorer of energy, discovered the nation’s first reserve of Shale Gas at Durgapur, located in Burdwan District of West Bengal. The Sarpi deposit is Asia’s only and first tapped gas reserve outside North America.
• The ONGC found the gas source in its first experimental project at Damodar basin while drilling its first well.
• The Central Government has employed the HELP (Hydrocarbon Exploration and Licensing Policy) to allow a project supporter to discover all types of hydrocarbons in the allotted block.

Conclusion                              

Shale gas could be one of the biggest fulfilments of primary energy requirement in the world if exploited and explored adequately.

The country like India, which depends on expensive energy imports, can meet the increasing energy demand by unlocking the domestic shale gas. However, the USA already has exploited the use of gas in the country, and it had a significant impact on its economy.

Other countries too, can take a note from the USA and boost their economic condition with the correct usage of this gas. This, in turn, will help the government to generate more revenues and create more employment opportunities for unemployed.

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