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 US currently has 2,000 onshore rigs; whereas, in the heart of Europe, we currently have 77 onshore.” And 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. In central Britain, the area between Wrexham and Blackpool in the west, and Nottingham and Scarborough in the east, could hold between 25 trillion cubic meters (Tcm) (822 trillion cubic feet [Tcf]) and 68 Tcm (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. As part of the agreement, announced October 22, GDF Suez will acquire a 25% share in 13 licenses covering 1,378 square kilometers (km2) (532 square miles [m2]) in Cheshire and the East Midlands in the Bowland shale play, marking its entry into licenses with shale gas potential in the U.K.

“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. The investment “complements the large presence of the group in the U.K.”

Other major players in the U.K. shale scene are iGas, Centrica, and Cuadrilla Resources. In June, the latter two entered a deal in which Centrica acquired 25% of the exploration license for Bowland shale in Lancashire, northwest England, covering about 1,200 km2 (463 m2).

Cuadrilla, which has its sight set on drilling additional exploration wells, is currently assessing site options for shale development.

“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 U.K. government has supported shale development, despite protests, and lifted an 18-month moratorium on hydraulic fracturing, the technique that has led to success for unconventional plays in the U.S.

“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.

“One of the key areas in terms of how the government has looked at encouraging and designing the regulatory environment has been to take a sophisticated and well understood offshore regulatory environment and apply it to the onshore element,” he added. However, it will need to be adapted, taking into account the different issues faced onshore, particularly concerning densely populated areas where shale is found.

But shale development in the U.K. has encountered some opposition with fears of groundwater contamination among other concerns. Cuadrilla’s drilling plans, for example, faced a setback when protesters opposed to hydraulic fracturing brought operations at the Balcombe drill site to a halt.

“Gaining the public’s hearts and minds is an important obstacle that needs to be overcome, and it is very, very relevant in this debate,” Lobo said later pointing to the positives. Among the benefits of shale development in the U.K. are energy security, balance of trade, and job creation.

Currently, “the focus in the U.K. is very much around ensuring that we have a sound regulatory and environmental policy in place,” he said. “Once this is done the effort will switch to engaging with the public and driving the economy forward."