Shale gas reserves in northwest England could meet the UK's entire consumption for more than five years, prospector IGas says.
The shale gas explorer says technical studies now point to an estimated range of 15.1 to 172.3 trillion cubic feet (tcf) of gas in place at its licence areas which sit between Liverpool and Manchester, with a most likely estimate of 102tcf.
The estimate dwarfs their previous forecast of more than 9tcf as well as national proven reserves, and although chief executive Andrew Austin says only some of the gas would be recoverable from the area, nonetheless the potential volumes could change Britain's energy balance.
"We (Britain) import around 1.5tcf, we consume around 3tcf a year, assuming you could recover technically something like 10 to 15 per cent of the shale gas in place, then it could move import dependency out for about 10 to 15 years," he told the BBC.
Britain expects to issue an upward revised estimate of its shale gas resources this summer. A preliminary estimate by the British Geological Survey put recoverable reserves at around 5.3tcf, enough to meet national consumption for less than two years.
Shares in IGas rose to a four-month high of 107.5 pence on Monday morning, and were trading 8.6 per cent higher at 101 pence by 8am.
Drilling is planned for later this year, which would refine the estimates and the potential of the basin, the company says.
Analysts at Jefferies say that while the estimate range was large, the most likely forecast of about 100tcf showed the significance of the licence, both relative to IGas's resource base and the UK's existing gas reserves.
"While only a portion of that will be recovered even in a success case, total proven gas reserves of the UK are about 7tcf, indicating the materiality of the potential," they said.
According to government figures, the UK's total current proven, probable and possible gas reserves stand at around 25tcf, including 17tcf of proven and probable gas.
But responding to IGas’ shale gas reserve estimates, Greenpeace Policy Director Doug Parr pointed out that every analyst, from Poyry, to Ernst and Young and even Cuadrilla say UK shale will have little or no impact on people’s bills.
"Deciding how much gas there is based on the word of a shale gas firm is like buying a second hand car without lifting up the bonnet and asking the price.
"IGas may be keen to impress its investors in China but these figures are just hype. The world's largest oil and gas firms were attracted to Poland by similar claims; now they are rushing to leave,” he says.
"MP's voting tomorrow on the decarbonisation of the power sector should remember that sending drilling rigs into our rural villages in a desperate hunt for gas could cost them votes. They should instead vote for clean, renewable energy that will bring bills down over time.”