Centrica Plc (CNA), the U.K.’s largest residential-energy supplier, said tax relief for natural-gas drilling will bolster its Cygnus project in the North Sea.
The development, which Centrica says is the biggest gas discovery in the southern North Sea for 25 years, will create 4,000 jobs and supply about 5 percent of the nation’s energy at peak production, according to a company statement. The project needs 1.4 billion pounds ($2.2 billion) of investment, it said.
The government today said gas drillers will get a credit valued at 500 million pounds as the U.K. promotes the use of the fuel and cuts support for renewable energy. The Department of Energy and Climate Change lowered subsidies for onshore wind by 10 percent, offered less financial support than expected for biomass projects and said it may further reduce aid for solar.
“As the U.K. becomes increasingly dependent on imported gas, today’s announcement represents a significant boost to the U.K.’s long-term energy security as well as creating much needed jobs,” Centrica Chief Executive Officer Sam Laidlaw said in a statement.
The Treasury said the government will this year publish a strategy to ensure drillers get long-term commitments on tax breaks for tapping natural gas. The 500 million-pound incentive seeks to spur investment in large gas fields in shallow waters.
GDF Suez (GSZ) SA, a partner in Cygnus, also welcomed the plans. Bayerngas GmbH is the other partner in the development.
To contact the reporter on this story: Brian Swint in London at firstname.lastname@example.org
To contact the editor responsible for this story: Will Kennedy at email@example.com