Reliance Industries Limited (RIL) is currently focusing on raising the scale of its shale gas business in the US. This company led by Mukesh Ambani will invest yet another $ 4 billion (Rs 24,000 crore) in the span of next three years to acquire more shale gas assets in US. In the past, there have been huge investments pouring in this sector. After taking into account this latest investment plan, the total investments will amount to $10 billion (Rs 60,000 crore) by Reliance for shale gas business in that country.
At the last Annual General Meeting, Ambani had announced that the shale gas will get major attention from the company for upcoming three years. The revenue from US Shale has almost doubled in the last year. “Production from shale gas will be in excess of one third of our aggregate production this year,” he said. RIL’s share of natural gas output from this growing business has reached a production level of 11 million units per day. According to market analysts, this production capacity will further increase in the coming future.
In partnership with its US subsidiary (branded as Reliance Holdings USA), Reliance has further invested $6 billion in a series of shale gas assets in the US with Chevron Group, Pioneer Natural Resources, Carrizo Oil and Gas Inc.
Inspired by its growth rate in the shale gas business, RIL has also planned to explore new opportunities in refinery/petrochemicals, fertilizers, power generation and coal mining in the US.
A senior RIL official said: “Since it is still on the drawing board, the investment numbers have not yet been worked out. Basically, the intent is to see that the gas being produced in the US can be used for our own projects or to add value to the existing business.” It is also speculated that the company might adopt the acquisition route or enter a joint venture to establish itself in the market. RIL is also considering setting up a gas-based power or fertilizer unit along with a gas-based petrochemicals plant in the US. It may also reap benefits by buying stakes in the liquefaction facilities of US to sell its gas an LNG. The gas-based plant can be used in production of power, fertilizer or any petrochemical unit, but it will turn out to be a gold-mine for the energy-giant of India.
In India, a shale gas exploration policy yet needs to be prepared. Till then, the domestic petroleum retailing businesses will be affected by the government controls to rule out their product pricing.