Centrica heads into the Valleys to explore for coal bed methane

Centrica plc, the parent company of British Gas, today announced it has secured interests in three exploration licences to drill for gas within the coal beds of South Wales, as part of its broader search for new energy supplies for its British Gas customers.

As part of the UK government's 13th Onshore Licensing round, Centrica has secured interests in three licences close to Rhondda, Caerphilly and Pontypridd in South Wales.  The company will hold 100% interest in two licences, with a shared interest in a third.

Centrica will commence pre-development studies later this year, with a planning application expected in late 2009.  Subject to planning and internal approvals, drilling could commence in 2010, with possible development by 2014.

Coal bed methane, which is an emerging technology used to drill into depleted coal fields to access gas trapped within the rock structures, is relatively untried within the UK, but well developed in North America, including at Centrica's North American subsidiary Direct Energy.  Direct Energy has expertise in drilling over 160 coal bed methane wells since 2000.   Coal bed methane also has the long term potential to store CO2 in old wells once gas has been produced.

Sam Laidlaw, Chief Executive of Centrica, said: "As part of our continued investment programme to secure long term energy supplies for our British Gas customers, emerging technologies such as coal bed methane offer an opportunity to maximise the UK's own energy resources."