Fylde’s £100m fracking deal

File picture by Gabriel Szabo/Guzelian - 26/8/11''A worker at Cuadrilla Resources' fracking plant near Preston, Lancashire. Cuadrilla has been given the go-ahead to resume fracking operations in Lancashire after a ban on the controversial process of shale gas exploration was lifted by the Government today (13 December 2012).
File picture by Gabriel Szabo/Guzelian - 26/8/11''A worker at Cuadrilla Resources' fracking plant near Preston, Lancashire. Cuadrilla has been given the go-ahead to resume fracking operations in Lancashire after a ban on the controversial process of shale gas exploration was lifted by the Government today (13 December 2012).
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Infrastructure giant Centrica has bought a 25 per cent share in the Bowland shale fracking licence from Cuadrill Resources and AJ Lucas for a deal worth potentially £100m.

Infrastructure giant Centrica has bought a 25 per cent share in the Bowland shale fracking licence from Cuadrill Resources and AJ Lucas for a deal worth potentially £100m.

Centrica has paid £40m in cash and will also pay exploration and appraisal costs of up to £60m if fracking goes ahead.

The controversial process sees water and chemicals fired at high pressure into shale rock, to release gas trapped between the layers. Protesters believe the process is environmentally unsound. But the firms behind the practice believe the UK’s regulatory system and their safety procedures are sufficient to make the process safe.

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 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 mirector 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.”

An Institute of Directors report estimates natural gas from shale could reduce the amount of gas the UK has to import in 2030 from 76 to 37 per cent. Nationwide investment could reach £3.7bn a year, supporting 74,000 jobs across the industry and its supply chain.

However, opponents to fracking believe far fewer jobs will be created and there will be little movement in gas prices.