SHALE GAS

AN OVERVIEW & WAY FORWARD

DGH
DIRECTORATE GENERAL OF HYDROCARBONS

(UNDER MINISTRY OF PETROLEUM & NATURAL GAS)

06 Aug 2010

Presentation Outline
Salient aspects of shale gas

Shale gas - Global

Shale Gas - India
US co-operation

Way forward

What is Shale Gas ?

Unconventional Natural Gas produced from
shale
Gas remains adsorbed in the laminations,
fractures and in the pore spaces

Shale acts as Source, Reservoir & Cap rock

for the Natural Gas
Characterized
Producibility

by

Low

Permeability

Produced through Fractured /Horizontal wells

&

SCHEMATIC OF SHALE GAS RESOURCE

Conventional
Non Associated
Gas
Conventional
Associated Gas

Characteristics of Shale Gas

Mature Petroleum source rocks
Rich in Organic Matter (TOC=0.5-15%)
Usually Thermogenic
Low in Permeability (K= 0.01mD or less).
High Natural Gas in-place volumes

Shale Gas-Some Facts

~ 40,000 wells in North America
1,200 Tcf recoverable shale gas
Low permeability, over or under-pressured,
contain concentration of radioactive elements
Require large volumes of water to hydraulically
fracture
Require high density drilling, well spacing 10
acres or less

Shale Gas-Some Facts

Well Cost

:US$MM 7.5 10.5 per well

(Oil/Gas: ~2 US$MM, CBM:~ 1 US$MM)

Cost to find & develop

:US$ 5 /1000 SCF & Less

4 years Ago
Shale gas project Viable at US$ 6 per MMBTU
Now

Shale gas projects Viable at US$ 3 per MMBTU

Marcellus shale at US$ 2.5 per MMBTU
Source : Web sites

Emergence of shale gas ?

Large untapped resource of Shale Gas available
Earlier shale gas wells drilled vertical and non-profitable
due to low Producibility
Declining conventional oil/gas reserves necessitate
unconventional reserves supplementation to meet
demand- supply gap
Current oil/gas prices make unconventional reserves
exploitation economically challenging
Modern technologies like Horizontal wells & Hydrofracturing

What changed thee game?

SCHEMATIC SHALE GAS COMPLETION

Horizontal Drilling

Target Zone

HORIZONTAL SHALE GAS COMPLETION

An example of ideal shale gas Frac

Job at site

In the Marcellus, 3 to 5 million gallons (or 900 truckloads) water for completing
a standard 5-10 stage lateral utilizing slick water fracs every 300 ft.

Gas In Place
GIP = Adsorbed Gas + Free Gas
Adsorbed Gas-in-Place Relationship

Gas Formation Volume Factor

Free Gas-in-Place Volume

Shale Gas Resources

Resources Endowment

Underdeveloped
Recoverable

(Tcf)

Resource (Tcf)

Eastern US

3760

453

Western Canada

1380

240

Australia/New Zealand

Huge resources ,But yet to Develop

Other Countries*

4810

175

TOTAL (Tcf)

9950

868

Country

* India, China, South Africa & Europe

World Shale Gas of 16,110 Tcf (456 Tcm) (IEA in World Energy outlook 2009)
Shale Gas Resource is more than 3 times of global CBM resource till date.
World wide USA & CANADA are the only countries currently producing shale gas.

Source: ARI , 2009

Global Shale Gas Volumes

7,000
Tight Gas
Coalbed Methane
Gas Shales

6,000
5,000

GIP TCF

4,000
3,000
2,000
1,000
0
North & Eastern & Former
South
Western
Soviet
America
Europe
Union

Middle
East &
North
Africa

SubSaharan
Africa

China

Source: Rogner 1997

Over 32,500 TCF of unconventional gas identified

Global Shale Gas Volumes

Shale Resource Plays Comparison

U.S : Horizontal Vs Vertical wells - Shale Gas Production

16000 SCMD Vs 4000 SCMD

Source: EIA , 2010

Shale Gas Production

~ 77 MMSCMD (2007)

~ 220 MMSCMD (2009)

Shale Gas Production

Impact of Well Spacing & Gas Recovery

Shale Gas Prospect in India

BASIN

GEOLOGICAL AGE

CAMBAY

TERTIARY

RANIGANJ

PERMIAN

JHARIA

PERMIAN

BOKARO

PERMIAN

KARANPURA

PERMIAN

TALCHER

PERMIAN

ASSAM

TERTIARY

SATPURA

PERMIAN

KG

TERTIARY

10

CAUVERY

TERTIARY

11

INDO GANGATIC

PROTEROZOIC/
TERTIARY

Shale Gas Deposits in India

Huge shale deposits in basins of Gondwana,
Assam-Arakan, Cambay, Rajasthan, KG &
Cauvery
Damodar valley: Barren Measures in the Gondwana
basins - TOC ~ 6.25%
Cambay Basin: Cambay shales - TOC ~ 14.3%
Rajasthan: Baisakhi-Bhadasar Formation- TOC ~ 4.9%
KG Basin: Bhuvanagiri Formation & Raghavpuram shales - TOC
between 3-5%

Cauvery Basins: Mandapeta, Andimadam & Sattapadi

shales - TOC between 3-8%
Detailed shale mapping & potential assessment required

Indian Shale Reservoir Prospect

Depth- (m)
Net Thickness- (m)

USA
Bamett
2000-2500
15-60

TOC- %

4.5

Vitrinite Reflectance (%)

Permeability Thickness- [Kh(md-ft)]
Gas Content (M3/ton)
Pressure Gradient (psi/ft)
Recovery Factor (%)

1.0-1.3
0.01-2
8.0-10
0.43-0.44
8-15

Property

India
Tertiary- Cambay
Permian- Gondwana
1000-2500
1200-2200
100-600
30-150
TOC= 2.3-5.4%; average
S2= 2.5-8.3 mg HC/g
4.0-6
rock; average HI=91-154
mg HC/g TOC
0.6-1.1
1.2-1.4
NA
NA
2.5-4.5
5.0-8.0
0.43
0.43-0.47
NA
NA

Assam-Arakan Basin
2100-6500
50-950

0.9-9.8
0.5-8.5
NA
NA

Shale gas prospect in India- looks attractive-.

Comparison with other analog data showing Indian shale reservoirs are rich in TOC with
right maturity, permeability and a higher play thickness.
Massive multistage HF & Horizontal Wells will be required in order to crack the hidden
treasures.

US Cooperation on shale gas

Meeting at Washington on 02 June 2010 between

Planning Commission & US Deptt of Energy

Possible US India co-operation on shale gas

MOU signed between the two countries on 24.11.09 to enhance

energy cooperation & securities
USGS to conduct resource assessment & training
Sharing of G&G data by India

Global Shale Gas Initiative Workshop (23-24 Aug 2010)

Issues - Shale Gas in India

Large area under PEL/ML (2/3rd)
Policy requirement for Fast track exploration

Environmental & Logistic

Water Requirement, Disposal, NORM (?)

LAQ

Interest by existing operators

ONGC in CBM area in WB & Jharkhand & in Cambay Basin
JTI : Small quantity in vertical H/F well
Cairn: Possible Shale gas prospect in Rajasthan

Action taken- Shale Gas in India

Meeting at MoPNG Oct 2009
DGH to prepare Approach paper Submitted
ONGC to step up R&D efforts
Pilot project with M/S Schlumberger

US-India Energy Dialogue May 2010

Shale Gas Advisory package
USGS Shale gas Resource Assessment
USTDA Production capability & Economics
MMS 3 day workshop on incentives & measures
DOC arrange field visit

Action taken & Way Forward - Shale

Gas in India
Meeting by Secretary, P&NG (June 2010)
First round by End 2011
Identification of areas for offer & framing of POLICY
Policy framework exclusively for shale gas
Amendmend to P&NG Rule
Contractual & Fiscal regime similar to CBM
MOU with USA for Technology Transfer, know how.

Action taken & Way Forward - Shale

Gas in India
Meeting by JS(E), MOPNG July 2010
Team Formation (DGH/ONGC/OIL/GAIL) Shale mapping & Policy
R&D Status report by ONGC
Shale mapping & Resource assessment
Meeting with ONGC July 2010
Meeting with ESSAR & SLB

Way Forward
Policy formulation
Shale mapping, Identification of areas