British gas owner Centrica has become a 25 per cent investment partner in a shale gas exploration venture in the Lancashire area.
The company has paid £40m in cash and committed to provide further tens of millions of pounds to the joint venture operated by Cuadrilla Resources after certain operational milestones will have been met.
It is believed the Lancashire region has abundant resources of shale gas that can help to efficiently address UK’s increasing dependency on imported 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.
According to Francis Egan, the chief executive of Cuadrilla, today’s announcement represents a significant step in the on-going exploration programme of shale gas reserves in the Lancashire Bowland Basin.
"Natural gas from UK shale can create thousands of jobs, generate significant tax revenues, reduce our ever-increasing reliance on imported coal and gas and make a positive contribution to the country's balance of payments”, Egan said.
Centrica said it will be ‘fully involved’ in the exploration, although Cuadrilla will remain the operator.
However, the environmentalists haven’t welcomed the announcement with enthusiasm. According to the Greenpeace spokesman Joss Garman, Centrica’s involvement in the venture is a proof that exploiting shale gas reserves won’t have any effects on soaring energy bills.
"Now British Gas will be known, not only for sky high fuel bills, but for industrialising the English countryside and pursuing a business plan that's entirely predicated on digging up and burning polluting fossil fuels with no regard for the impacts on climate change", he said.