UK shale gas potential seen as good as the best in the U.S.

LONDON (Bloomberg) -- Britain’s shale gas production has the potential to be as good as the best performing shale basin in the U.S., the Marcellus formation.

That’s the central finding from the body responsible for promoting onshore gas exploration, which tested levels at three sites across the north of England. UK Onshore Oil and Gas increased the estimate of well productivity to 5.5 Bcf per lateral well, a jump of 72% from a 2013 estimate by the Institute of Directors lobby group.

The UK’s progress on hydraulic fracturing has been painstaking, held back by tight government controls on seismic activity and fervent public opposition. Closest to commercially producing domestic gas is Cuadrilla Resources Ltd., which has said it is sitting on top of a high quality resource but can’t do anything else until regulations around tremors are relaxed. IGas Energy Plc said Monday that it discovered a “significant” seam of shale gas at its Springs Road site in Nottinghamshire.

“This is a very significant upgrade to previous estimates,” Ken Cronin, chief executive officer of UKOOG, said in an interview. “The potential is enormous, we know that the UK is now beginning to rely on LNG and Russian gas. Now is the time to look at what’s beneath our feet.”

If Britain rolled out 100 shale gas sites across the country, net gas imports would almost be eliminated. That would improve the nation’s balance of payments by 8 billion pounds ($10 billion) a year and could see annual gas production peak at 1,400 Bcf by the early 2030s, UKOOG said.