IGas spuds third CBM well in ‘huge potential’ UK
IGas sees coal-bed methane (CBM) making a “very significant contribution” to the UK’s energy mix, claiming the country has great production potential
And, as North Sea supplies go into decline, London-based IGas believes the CBM industry will become an “increasingly attractive alternative” to UK consumers.
IGas spudded a third well at its Doe Green site, between Warrington and Widnes in the northwest of England, on 19 July. Chief executive Andrew Austin declined to give PEU a reserves estimate for Doe Green, but said the company was encouraged by flow rates in well testing of the pilot project.
“We know how much gas we’ve got and how much we can get out. The hurdle is how fast we can get it out of the ground,” said Austin. IGas has pegged its total recoverable CBM resource from its UK holdings at more than 1.7 trillion cubic feet (cf).
In 2004, the British Geological Survey (BGS) estimated there could be 102 trillion cf of CBM in the UK. But these potentially vast resources have yet to be commercially developed. (The country has remaining proved conventional gas reserves of 9 trillion cf, according to Cedigaz.)
But Austin said the UK needs a much more developed supply chain to make commercial CBM development workable. “There’s a fairly sporadic hydrocarbon drilling business in the UK,” he told Petroleum Economist.
IGas owns 11 UK exploration and development licences, two methane-drainage licences and three offshore blocks. These lie across parts of Cheshire, Yorkshire, Staffordshire and the north Wales coast. The company has completed drilling of a second CBM pilot production well at Keele University and has planning permission for a further seven sites in and around the east and northeast of England. IGas said it will provide further details on the progress of the well over the coming weeks and months.
Earlier this month, IGas signed a contract for a four-well programme, which includes the recently spudded Doe Green probe. So far, only two pilot production wells are on stream, producing small amounts of gas. But since buying former business partner Nexen Exploration earlier this year, the company has been ramping up its drilling activities across multiple sites.
IGas aims to drill four to six new wells by spring next year and hopes to have a further 20 sites operational by the end of 2014 – each with four to six wells, and each well with around six lateral sections. The company has signed contracts for two drilling rigs.
And it’s not just IGas investing in the UK’s CBM potential. Australia’s Dart Energy claimed in June that it could have 1.1 trillion cf of gas in place within its acreage in Scotland. The company recently said it has forged a five-year sales deal with utility company Scottish and Southern Energy for its CBM output.