Abstract This study presents a mathematical programming approach for evaluating the exploitation and distribution of shale gas from potential reserves at a national level, depending upon existing infrastructure and water availability. The study describes an MILP model that simultaneously integrates water management with the design and planning of the supply chain, from basins to distribution markets and fresh water supply from available watersheds. The model is applied to a case based on the potential exploitation of shale gas basins in Mexico. The parameters of the model are mostly taken from the databases of the country, processed through the geographic information system ArcGIS. The solution provides the optimal decisions for exploitation and distribution, as well as for freshwater source selection and optimal wastewater management. Water management strategies include disposal, wastewater treatment in municipal plants and onsite treatment. The negative impact of water consumption of the optimal exploitation systems is assessed based mainly on the estimation of the water stress index. Results show that the shale gas exploitation would favor the energy independence of the country, but the availability of freshwater for some municipalities would be compromised.