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Cuadrilla in Talks With United Utilities for U.K. Water Supplies

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July 22 (Bloomberg) -- Cuadrilla Resources Ltd., a U.K. shale explorer, is in discussions with United Utilities Group Plc over water supplies for its sites in northern England.

The company is looking at a potential six new sites in the Bowland Basin, a Cuadrilla official said today by phone, asking not to be identified by name citing internal policy. Part of that search is to identify where the water would come from for its operations, which require about 50,000 barrels or 2.1 million gallons per hydraulically fractured well, he said.

Hydraulic fracturing, or fracking, blasts a mixture of water, sand and chemicals underground to release trapped oil and gas from rock formations. Peter Hewer, a United Utilities spokesman based in London, confirmed the company is in early discussions about Cuadrilla’s water requirements. United Utilities is the U.K.’s largest publicly traded water company.

Cuadrilla said the amount of water it’s seeking for the fracking is less than half of 1 percent of what United Utilities supplies a day. Using the utility’s supplies would help limit the number of trucks transporting water on roads, Cuadrilla said.

Environmental groups are concerned the drilling technique blamed for earth tremors in Lancashire, northwest England, that led to an 18-month moratorium on fracking uses so much water and may contaminate supplies. The ban was lifted by the U.K. in December.

The government said last week shale developers would be subject to a 30 percent tax rate and not the maximum 62 percent applied to the oil and gas industry as it seeks to cut dependence on imports amid declining reserves in the North Sea.

Cuadrilla is based in Lichfield, England.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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