IGas Energy breaks ground at Keele University CBM development project

Emerging UK-based CBM gas producer IGas Energy (LON:IGAS) has begun drilling on its licenses in Staffordshire. The company spudded the first well at the Keele University Science Park on the 11 June. The well is targeting an 11ft thick coal seam, at a depth of 1,757ft.

“These licences in Staffordshire have always been an area of great interest to IGas and we look forward to seeing the productive capacity of these coals”, IGas chief executive Andrew Austin commented.  The Keele University project is the first of two Coal Bed Methane (CBM) developments slated for this year, with the company also planning to drill at the Point of Ayr site in North Wales. Elsewhere, IGas continues to operate its pilot-production plant in Cheshire, and is working towards full-scale commercial production in 2011.

Once drilling has been completed, IGas plans to carry out a long-term production test on the well. The company highlighted that testing the nearby Willoughbridge well, 5.5 miles to the south-west, has previously shown encouraging results in relation to the permeability of the coals in the area.
CBM gas is found in seams of coal and is extracted by drilling into the seam. In the UK, the CBM industry is in its infancy. CBM as a source of gas has been developed widely throughout parts of the United States, Canada and Australia.

IGas believes that CBM is an increasingly attractive source of gas, particularly in the UK. “Increased concerns over security of energy supply and the harshest winter for some 40 years in the UK has highlighted the need for the UK to produce more of its own gas resources”, Austin added. 

According to independent estimates, IGAS currently has enough gas to supply electricity to over 7% of the UK's household's for 15 years, and it is the largest independent CBM producer in the UK. “IGas has the funding, the know-how and the resource base to deliver secure gas commercially to industrial customers in the UK.  We are on track to establish our first full UK gas production site in 2011”.

IGas’ current production site is located in Cheshire, the Doe Green site has three lateral wells and one vertical well. One of the lateral wells has been producing CBM for over a year. The produced gas is used to generate electricity, which is subsequently sold into the UK grid.

The company’s first full-scale commercial production site is planned at Ellesmere Port, located on the group’s PEDL 184 and PEDL 190 licenses between the tidal estuaries of the river Dee and the river Mersey.

According to IGas, a typical full production site would be expected to produce between 4 and 10 million standard cubic feet of gas per day. The emerging CBM producer said it currently has mid-case estimated Gas Initially in Place (GIIP) of 3,558 billion cubic feet across its acreage.

In January IGas secured planning permission for the Ellesmere Port CBM project and the company stated that full-scale commercial production is targeted in 2011.