Centrica buys into the UK shale gas revolution

13th Jun 2013 09:14

Gas-centric group Centrica has acquired a share in two shale gas exploration projects based in Lancashire. The British Gas owner has purchased a 25% interest in the Bowland shale licence operated by Cuadrilla Resources, where initial exploration suggests there could be 200trn cubic feet (tcf) of gas in place.Centrica paid a total of £40m in cash to UK-based Cuadrilla and Australian co-investor AJ Lucas, and has agreed to pour in £60m for further exploration and appraisal work. Following the exploration and appraisal phase, a further £60m could be paid if Centrica decides to continue into the development phase, where locals fear the 'fracking' drill techniques used to extract shale gas.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."There have recently been rumours reporting that Centrica has plans to mount a bid for Ireland's state energy firm Bord Gais Energy, possibly in league with one or more partners in a £1bn joint bid.Shares in Centrica were down 0.8% at 365.2p at 09:35 on Thursday.OH