Centrica invests £100m in Lancashire fracking
The company behind British Gas has bought a significant stake in rights to the shale gas reserves across 450 square miles of Lancashire territory.Centrica plc has acquired a 25% interest in the Bowland exploration licence (PEDL165) from Cuadrilla Resources and AJ Lucas for £40m. Centrica will also pay exploration and appraisal costs of up to £60m.
The Bowland licence is operated by Cuadrilla, and three exploration wells have been drilled to date. The data obtained from drilling these three wells has confirmed the shale formation thickness and the presence of natural gas.Although initial data suggests that there could be 200 trillion cubic feet (tcf) of gas in place within Cuadrilla’s Bowland Shale licence in Lancashire, further drilling will be required to establish whether the discovery is commercial.
Mark Hanafin, managing director of Centrica’s international upstream business, said: “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.“The government’s clear commitment to developing the UK’s shale gas industry is creating the right environment for companies to invest and to deliver those benefits.
“This transaction presents an attractive opportunity for Centrica to explore the potential and commercial viability of natural gas from shale in the UK, while utilising its expertise as a responsible operator and developer of UK gas resources.” Centrica owns and operates gas fields off the Lancashire and Cumbrian coast, and is responsible for around 400 jobs in the area.