India will launch its maiden bid round for exploration of shale gas during the XII Plan (2012-17) with an aim to meet its rising energy needs, Directorate General of Hydrocarbons (DGH) S. K. Srivastava said here on Tuesday.

“The government is planning the first round of shale gas during the XII Plan after assessment of resources is completed,'' Mr. Srivastava said at the Shale Gas India 2011 conference.

Shale gas or natural gas trapped in sedimentary rocks (shale formations) below the earth's surface is the new focus area in the U.S., Canada and China as an alternative to conventional oil and gas for meeting the growing energy needs. As per available data, six basins — Cambay (in Gujarat), Assam-Arakan (in the Northeast), Gondawana (in central India), KG onshore (in Andhra Pradesh), Cauvery onshore and Indo Gangatic basins, hold shale gas potential.

He said the DGH had initiated steps to identify the prospective areas for offering. “Legislative changes will be required for shale gas exploration. Simultaneous exploitation of different sources such as shale gas and coal bed methane is required,'' he said.

Under the current policy, exploration and production of conventional oil and gas and coal bed methane (CBM) is allowed.

However, shale gas exploration faces several challenges such as the availability of water and vast tracts of land. Mr. Srivastava said 3-4 gallons of water were required per well for hydraulic fracturing.

Petroleum Secretary G. C. Chaturvedi said India's gas demand was likely to rise from 290 million standard cubic metres a day in 2012-13 to 470 mscmd in 2016-17. Against this, domestic supply will increase from 124 mscmd to 220-230 mscmd only.

The balance has to be met through either imports or through unconventional energy sources such as shale gas. ``India has signed an MoU with the U.S. for assessment of shale gas resource and developing policy framework to exploitation of the resource,'' he said.

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