British shale gas explorer Cuadrilla to step up work

LONDON Fri Jul 5, 2013 12:44pm BST

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LONDON (Reuters) - British shale gas driller Cuadrilla (CNA.L) said on Friday it aims to step up exploration and hydraulic fracturing work at its main sites in Lancashire after government estimates last month supported hopes of major reserves.

Cuadrilla said it wants to hydraulically fracture and test shale deposits at its site at Grange Hill, Lancashire, some 400 kilometres (248 miles) northwest of London.

It will also seek consent to drill up to three vertical exploration wells, to be discussed with local communities before the locations are made public, the company said.

This adds to plans to drill, fracture and test gas flow at up to six new temporary exploration sites in Fylde, also in Lancashire.

But drilling and production testing at Anna's Road in neighbouring Westby will be deferred, it said.

Britain last month doubled its estimate of shale gas resources in the north of England's Bowland shale area to 1,300 trillion cubic feet, renewing hopes of reducing the country's growing reliance on imports.

Cuadrilla said the locations and order of drilling at its new sites will be determined over the coming months. The firm warned of extended testing of gas flows at fracked wells.

"The purpose of all our ongoing exploratory work is to demonstrate that natural gas can be produced from the shale in commercial quantities," Cuadrilla CEO Francis Egan said in a statement.

Shale gas refers to natural gas trapped in dense rock formations. The process of fracking, or hydraulic fracturing, involves pumping water and chemicals deep underground to break open the rock. The process has sparked some fears it could cause earthquakes or contaminate drinking water.

Test drilling over the next few years will prove critical for the nascent industry in Britain, and must reassure a sceptical public and vocal environmental lobby concerned about the effects of fracking.

UK utility Centrica (CNA.L) recently bought a quarter stake in Cuadrilla Bowland shale licences. French oil company Total (TOTF.PA) has also said it would like to explore for shale gas in Britain.

(Reporting by Oleg Vukmanovic; editing by Jason Neely)

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