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Basque province open to shale developers

Up to 180 billion cubic metres in 13 unconventional-gas deposits in Gran Enara

Álava province, in Spain’s Basque region, could hold significant shale-gas reserves, the government of the north-central region claims.

Basque regional premier Patxi López said studies carried out in Álava identified 13 unconventional-gas deposits in the Gran Enara area, with resources of about 180 billion cubic metres (cm). López told local media that the regional government will work with US companies Heyco Energy and Cambria Europe to analyse and develop the resources.

The government will invest €40 million ($53.4 million) in the project, through regional energy board Ente Vasco de la Energia (Eve). Heyco and Cambria will invest €60 million between them. Eve will hold a 42.88% stake in the project, with Heyco having 21.88% and Cambria taking a 35.3% interest. Plans include drilling two test wells to assess whether the gas can be extracted commercially.

In a note on the Basque government's website, López said he wants to “open the doors” for business development between companies in the US and the Basque region.

With few domestic conventional oil or gas reserves, Spain is reliant on imports. The country’s 35.35 billion cm of gas consumption in 2010 was imported mainly by tanker in the form of liquefied natural gas, according to Cedigaz.

Spain’s shale-gas resources are unknown, but the US Energy Information Administration believes Europe could hold about 18 trillion cm of recoverable shale resources. Such estimates have drawn interest from oil and gas companies. International operators, such as BNK Petroleum and Realm Energy, have recently increased their shale holdings in Spain, ramping up their hunt for unconventional gas.

BNK has described Spain’s potential for developing shale gas as “very promising” and was recently awarded a 234,000 acre concession in the northern Castile and Leon region. BNK bought 61,200 acres in Cantabria – its first slice of Spanish shale-gas acreage – in April. The company is making plans to spud its first shale-gas wells in 2013.

In September, Realm, now owned by San Leon Energy, was awarded two shale-gas exploration permits in the Cantabrian basin covering around 200,000 acres.

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