Hydraulic fracturing in India: Shale potential & policy
Dr. D K GuptaProfessor & Head
Department of Petroleum Engineering & Earth SciencesUniversity of Petroleum & Energy Studies, Dehradun, India
E-mail: [email protected]
December 6 - 7, 2013Jaipur Marriott Hotel, Jaipur, India
Outline• India has good shale gas potential• Horizontal drilling and Hydraulic fracturing • Microseismic emissions – Heartbeats of a reservoir• Guar gum it’s in ice cream, toothpaste ,cosmetics ,paper
industry, and hydro-fracking …..• Shale gas policy -- a game changer • Conclusions
“Technology and market-based pricing are two factors to lead shale gas revolution” PM Manmohan Singh
• India’s energy needs may increase 3 to 4 times within the next 20 years• Foreign Secretary Sujatha Singh will be in the U.S. this month, with
shale gas imports and technology transfer• New gas price formula approved by the Cabinet in June 13. Would
double the domestic gas prices and encourage energy firms to invest in exploring shale gas.
• The recently approved shale policy, which allowed only state-run ONGC and OIL to explore shale resources in their existing oil and gas blocks.
• The ministry has proposed automatic extension of lease period in blocks held by private companies if they are interested in exploring shale gas
8th Asia Gas Partnership Summit 3rd Dec 2013,New Delhi
Good times!
India has good shale gas potential
Shale gas prospects
ONGC, OIL and RIL strongly placed to ride the emerging shale gas play
Shale gas is a "game changer" in energy markets
Rapid build-up of momentum in preparatory activities
Horizontal drilling and hydro-fraccing are crucial for extraction
Closure PressureNet Pressure is the Pressure Inside the Fracture Minus the Closure
PressureNet Pressure = 2,500 - 2,000 = 500 psi
Hydraulic StimulationFluid injection
Microseismic events
The idea that the stimulation process “ will take care of the geology” in unconventional reservoirs
is proving false.
Shale gas policy -- a game changer • Draft policy for shale gas, inviting suggestions from the general public,
stakeholders, environmentalists
• The pricing formula will be effective from April 1, 2014 for a period of five
years, , the effective gas price in April 14 is estimated at around $8.40 per
MBTU, double the current price of $4.20.
• The price for each quarter will be calculated based on the 12-month trailing
average price with a lag of one quarter (ie price for April to June 2014 will be
calculated based on the averages for 12 months ended December 31, 2013)
• The policy brief points out that conventional gas can occur by itself or in
association with CBM
• Draft policy suggests that there should be a mandatory rainwater harvesting
provision in the exploration area
ChallengesThere are two key challenges that need to be addressed upfront for smooth implementation of the shale gas policy:
1. Land lease mechanism- required minimum of 80 to 160 acres.
2. Water management practices - it takes 2 million to 4 million gallons of
water to drill and fracture a horizontal shale gas well
Guar gumGuar gum: it’s in ice cream, toothpaste ,cosmetics and hydro-fracking …..
• It’s a thickening agent
• How big boom is it? One estimate suggests that a typical oil well consumes
roughly 4,000 kilograms of guar gum .That pressure sent the price soaring–it
touched $28,000 a metric ton in 2012, up twelvefold in a single year.
• According to Halliburton , guar represents about 30 per cent of the cost of fracking
• Is the bean at risk of being replaced? Not likely. As a natural product, it is
environmentally friendly. And even when guar costs 10 to 15 per cent more than
chemical substitutes, drillers still prefer the real thing.
• “You have to have a big economic incentive to switch,” Browne says. “They’d
rather use the tried-and-true product.”
• The run on guar has led India to start ramping up production
Conclusions
• India has prospects of 600-2,000 TCF shale gas reserves as per
the Schlumberger estimates.
• 34 tcf of shale gas in the Damodar basin alone (compared to
India’s total conventional gas reserves of 47 tcf) as per the ONGC.
• E&P companies will be able to initiate concrete action once the
policy is ready and its production is still 2-3 years away from now.
• Earlier, guar gum was used mainly as an additive in ice creams
and sauces, but its use in shale gas extraction has risen
enormously
Help each
other!
HavePatience
3 H’s
“The key to everything is patience. You get the chicken by hatching the egg, not by smashing
it.“ – Arnold H. Glasgow
