With shale gas development still in its infancy in the U.K., companies are slowly stepping onto the shale scene and bracing for challenges ahead.

“In contrast to the U.S. we have less data points, and the indications are that the shale may be more complex [than] in the U.S. There is limited well data in the U.K.,” Anthony Lobo, partner, transaction services, KPMG Europe, said during a recent shale development global update. “We don’t currently have the infrastructure across the U.K. and Europe. To illustrate this, the U.S. currently has 2,000 onshore rigs; whereas, in the heart of Europe, we currently have 77 onshore.” Less than 10 of these are suitable for the U.K. shale industry, he added.

“So we have a long way to go in terms of having adequate infrastructure and developing a service industry,” Lobo said.

But the potential is too great to deter some companies. Central Britain could hold between 822 trillion cubic feet (Tcf) and 2,281 Tcf of shale gas, according to estimates from the British Geological Survey.

GDF Suez E&P U.K. and its partners plan to drill up to four wells targeting shale gas in the Bowland basin as part of an initial work program unveiled after the company entered a deal with Dart Energy.

“We are very confident about the potential of shale gas in the U.K. and its anticipated contributions to U.K. energy security,” said Jean-Marie Dauger, executive vice president of GDF Suez’s global gas and LNG business.

Other major players in the U.K. shale scene are iGas, Centrica and Cuadrilla Resources.

“There continues to be a significant amount of opportunity in the U.K.,” Lobo said.

Although energy demand in the U.K. is expected to remain flat, with natural gas accounting for between 35% and 40% of the U.K.’s energy demand between now and 2030, Lobo said U.K. gas imports are expected to increase from 50% to 76% by 2030. This, he said, is what is driving the government’s push to encourage development.

“The government is supportive of shale and is focusing its efforts at present on establishing a robust regulatory environment in addition a specific tax regime has been introduced to support progress around shale,” Lobo said, noting these include a pad allowance. The pad allowance cuts the tax on a portion of production income from 62% to 30% at current rates, according to the U.K. treasury department.

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