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RIL eyes third US shale gas deal

business Updated: Jul 14, 2010 00:18 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Reliance Industries Ltd (RIL) is close to finalising its third shale gas acquisition in the US. In what is being talked about as the company's biggest shale gas deal so far, industry sources said RIL is in active talks to acquire a 50 per cent stake in a shale gas asset in North America.

The acquisition is likely to be the biggest so far by RIL, sources said.

RIL entered into a partnership with Atlas Energy in April to acquire a 40 per cent interest in the latters 3,00,000 acres shale gas property in the US for $1.7 billion. Within three months, it announced its second shale gas deal to acquire a 45 per cent stake in Pioneer's Eagle Ford asset for $1.3 billion.

Flush with revenues from its Krishna-Godavari (KG)-D6 gasfield back home, RIL, sitting on cash reserves of close to Rs 22,000 crore has been on the lookout of acquisitions in US.

Shale gas extraction involves tapping natural gas trapped between layers of shale rock, similar to the extraction of gas from between coal seams.

More such acquisitions in shale gas projects in the US will follow, sources said. An RIL spokesperson refused comments on the development.

"Shale gas extraction is gaining momentum worldwide and especially in the US. An agreement is also expected to be signed between India and the US during the visit of US President Barack Obama later this year," said a senior petroleum ministry official.

Besides acquisitions of shale gas assets by RIL in the US, ONGC is also likely to execute some agreements with US firms during President Obama's visit to India.