Scottish Gas owner launches shale drilling bid

Centrica is in talks to buy a stake in licences for a fracking operation. Picture: PA
Centrica is in talks to buy a stake in licences for a fracking operation. Picture: PA
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Scottish Gas owner Centrica is muscling in on the UK’s shale gas potential with a bid to buy drilling rights in Lancashire.

The gas giant is said to be in talks to buy a stake in licences in the Bowland Shale rock formation from shale gas explorer Cuadrilla.

Staffordshire-based Cuadrilla claims to be sitting on 200 trillion cubic feet (tcf) of gas in the area and is leading the UK’s attempts to extract it using the controversial process of “fracking”.

The gas is found in shale formed from deposits of mud, silt, clay and organic matter. It is extracted by drilling into the ground and then pumping in high-pressure liquid and sand to release the gas.

The bulk of Centrica’s gas currently comes from dwindling North Sea resources.

News of Centrica’s interest in UK shale gas comes just days after rival explorer IGas Energy significantly increased its estimates of the volume of gas it has licences over.

Shares in IGas soared this week after it said it may have up to 172.3tcf of shale gas in a 300-square mile area in Cheshire – its previous estimate was just 9tcf.

The UK currently uses around 2.76tcf of gas a year.

The UK government last year lifted a moratorium on shale gas exploration by fracking, which had been imposed after Cuadrilla’s drilling led to minor earthquakes in Blackpool.

It has proved controversial in the US, where shale gas is already being exploited on a large scale, because the drilling process involves chemicals, including cancer-causing compounds, which can pollute water supplies.

Environmental campaigners also warn developing the fossil fuel could draw investment away from the UK’s renewables industry.