GDF Suez E&P UK (GDF) - the UK arm of French energy giant GDF Suez - has become the second utility firm to buy into British shale gas after buying a 25 per cent interest in UK onshore projects. (Release)
GDF will work with Dart Energy on 13 of its UK licenses, the latter said today. All of the licences (Dart currently holds 31) are for projects in England and Wales, in the western and eastern parts of the shale-rich Bowland Basin.
The area potentially holds around 1,300 trillion cubic feet of gas - over 40 years-worth of power for the country. The drive to exploit Britain's shale gas was furthered earlier in the year when the government pledged tax breaks and incentives for explorers. British Gas parent company Centrica has already bought a £40m 25 per cent stake in the Bowland acreage in Lancashire.
“We are very confident about the potential of shale gas in the U.K., and its anticipated contributions to U.K. energy security." said Jean-Marie Dauger, executive vice-president, GDF SUEZ, in charge of the Global Gas & LNG Business Line.
The agreement sees GDF pay Dart $12m (£7.44m) in cash, and meet Dart's 75 per cent share cost of up to $27m (in addition to its own 25 per cent share). The funds will support an agreed unconventional exploration and appraisal program over a three year period. The transaction effectively reduces Dart's net acreage by about 10 per cent, with it keeping a 75 per cent interest in and operatorship of each licence.
The deal will support the drilling of up to 14 exploration wells, said Dart's chief executive officer, John McGoldrick - four shale and 10 coal-bed methane.