Shale plans move forward at Scottish Power site

Plans to extract shale gas from near Scottish Power’s Hatfield gas storage site will move ahead after project partner Egdon Resources reported encouraging reserve findings at the Doncaster license area.

Egdon is one of the largest players in the UK’s burgeoning shale development sector and approached Scottish Power with project plans last year in order to undertake exploration work in the license area which is owned by the big six utility.

During the option period Egdon said it undertook a full evaluation of the site’s potential and is “very encouraged” by the results.

In return for a share of the licence interest Egdon will cover all associated costs of the exploration which will take place away from the storage facility. At the end of the exploration phase Scottish Power will have the option to remain in the project or to pass the remaining licence interests to Egdon Resources.

A spokesman for the utility said it is too soon to say whether Scottish Power will secure gas supply from the project, but the company could take up to 50 per cent of the extracted gas to supply its customers.

Scottish Power is the second of the big six to take steps towards shale development following Centrica which holds a 25 per cent stake in Cuadrilla’s Lancashire-based project. In addition, SSE Energy has already secured a five year offtake agreement with the Dart Energy operated license near Stirling in Scotland.

Other energy players leading the development of shale include French companies GDF Suez and Total.

The controversial process of extracting shale gas through hydraulic fracturing has prompted strong local opposition in some areas of the UK, and Scottish Power has been quick to add that the company has “no plans to look for any similar projects elsewhere in the UK”.