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Shale gas is a form of natural gas found in rocks called Shale. North America is the largest producer, accounting for 90% of the world’s shale gas output. In the US itself, shale gas accounts for only 6% of total production. However, the idea is spreading and European companies are striking joint ventures with US companies to prospect for shale. The technology is still new and hence expensive. But it is one of the cleaner sources of gas.

In India, shale deposits are found across the Gangetic plain, Assam, Rajasthan and many coastal areas, but neither the government nor the corporate sector has carried out any exploration or estimation.

Shale gas has already brought down natural gas prices by 75%, according to experts. As shale gas production rises going forward, analysts expect world’s natural gas reserves to increase by at least 20%. All this is driving American companies to look for shale fields in countries like Indian, China.

Commenting on the same, DK Pande, Director Exploration, ONGC, says the company is looking at the possibility and feasibility of gas production from shale. “The pilot project should start sometime in 2011. If we make a breakthrough, gas pricing will come down.”

Here is a verbatim transcript of the exclusive interview with DK Pande and Surya Sethi on CNBC-TV18. Also watch the accompanying video.

More on the potential of shale gas here