Gas giant Centrica is to invest up to £160million into shale exploration in the UK after taking a 25% stake in the Bowland exploration licence.
The £40million stake acquisition in the Lancashire-based licence has been bought from Cuadrilla and Australian service provider AJ Lucas.
But the gas firm will also pay exploration and appraisal costs of up to £60million after three wells were drilled in the sector which confirmed the presence of natural gas, and could pay the same amount again if it elects to develop the field.
However, further drilling work in the Bowland field, near Blackpool, will be required to see if the find is commercial.
Cuadrilla chief executive France Egan said the deal represented a ‘significant step’ in shale gas development in the UK.
Initial returns from the three wells suggest up to 200 trillion cubic feet of gas could exist in the area, which would offer a significant boost to the UK’s energy reserves.
A recent Institute of Directors report estimated shale gas could reduce gas imports to the UK by 2030 from 76% to 37%, and could be worth billions to the UK economy.
“With North Sea gas reserves declining and the UK becoming more dependent on imported gas supplies, it is important that we look for opportunities to develop domestic gas resources, to provide affordable sources of gas to our customers, and to deliver broader economic benefits to the UK,” said Centrica’s upstream managing director Mark Hanafin.
Don’t miss this month’s Energy supplement in the Press and Journal for a major feature on the UK’s shale gas industry – out on July 1
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