IGas, a coal bed methane (CBM) developer in the UK, has started commercial sales of electricity generated from CBM gas into the national grid – a first in the UK.

Initial volumes of electricity generated from CBM gas at its Doe Green site in Cheshire, in conjunction with IGas’ joint venture partner Nexen, is being sold to a major European utility under a three-month fixed contract.

Gas produced from the site is expected to increase and over the coming months this pilot should become capable of being able to power approximately 1,200 homes.

Andrew Austin, IGas’ CEO said, “IGas has shown that coal bed methane is capable of being a commercial proposition in the UK. The contribution this home-grown resource can make to powering UK homes and businesses could be significant – this is only the first step for what we know will be a growth industry.”

In a recent report from their Unconventional Gas Service, respected industry analysts Wood Mackenzie confirmed that the production of CBM gas in the UK was commercial at the current gas price as well as under anticipated long term future gas price assumptions. The report also estimated the resource potential available in the Cheshire Basin, which is located at the heart of the UK gas market, to be around 4 trillion cubic feet based on initial analysis.

Last month IGas announced that an independent evaluation of Gas Initially in Place (GIIP) undertaken by Equipose Solutions found that the Company’s resource base across the UK had increased by around 40 per cent since November 2008. The new, risk* weighted, net mid-case estimate for GIIP is 2,169 billion cubic feet, up from 1,554 bcf in November 2008, itself an increase over the original 893 bcf in December 2007.

• takes account of risk factors related to the potential of coals being absent or falling outside the cut off ranges used for GIIP

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