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| British Gas owner Centrica agrees £160m Bowland shale fracking deal | British Gas owner Centrica agrees £160m Bowland shale fracking deal |
| (4 months later) | |
| The British Gas owner, Centrica, will invest up to £160m in shale gas exploration and development in the north-west after agreeing a deal with Britain's leading fracking company. | The British Gas owner, Centrica, will invest up to £160m in shale gas exploration and development in the north-west after agreeing a deal with Britain's leading fracking company. |
| Centrica has bought a 25% stake in the Bowland exploration licence in Lancashire from Cuadrilla Resources and AJ Lucas for £40m. It will pay a further £60m in exploration and appraisal costs. | Centrica has bought a 25% stake in the Bowland exploration licence in Lancashire from Cuadrilla Resources and AJ Lucas for £40m. It will pay a further £60m in exploration and appraisal costs. |
| An additional £60m will be payable if Centrica subsequently decides to move into a development phase. | An additional £60m will be payable if Centrica subsequently decides to move into a development phase. |
| The entrance of such a big name into the British shale sector could be a catalyst for an industry that has until now been made up of relatively small companies. It follows speculation about a possible deal last week, and comes just months after the company played down prospects for shale gas. | The entrance of such a big name into the British shale sector could be a catalyst for an industry that has until now been made up of relatively small companies. It follows speculation about a possible deal last week, and comes just months after the company played down prospects for shale gas. |
| "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 Mark Hanafin, managing director of Centrica's international upstream business on Thursday. | "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 Mark Hanafin, managing director of Centrica's international upstream business on Thursday. |
| "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." | "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." |
| The Bowland licence is operated by Cuadrilla, with three exploration wells drilled to date. Centrica said data obtained from the drilling process had confirmed the presence of natural gas. | The Bowland licence is operated by Cuadrilla, with three exploration wells drilled to date. Centrica said data obtained from the drilling process had confirmed the presence of natural gas. |
| It added initial work suggested there could be 200 trillion cubic feet of gas in place relating to the Bowland shale licence, although it cautioned "further drilling will be required to establish whether the discovery is commercial". | It added initial work suggested there could be 200 trillion cubic feet of gas in place relating to the Bowland shale licence, although it cautioned "further drilling will be required to establish whether the discovery is commercial". |
| A report from the Institute of Directors in May estimated that natural gas from shale could reduce the amount of gas the UK has to import in 2030 from 76% to 37%. | A report from the Institute of Directors in May estimated that natural gas from shale could reduce the amount of gas the UK has to import in 2030 from 76% to 37%. |
| UK-wide investment could reach £3.7bn a year, supporting 74,000 jobs across the industry and its supply chain, the report said. | UK-wide investment could reach £3.7bn a year, supporting 74,000 jobs across the industry and its supply chain, the report said. |
| Centrica insisted in January that shale gas was not "the game-changer we've seen in North America" and played down speculation that it might start drilling. | Centrica insisted in January that shale gas was not "the game-changer we've seen in North America" and played down speculation that it might start drilling. |
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