According to OGJ, the UK held an estimated 18.8 trillion cubic feet (Tcf) of proven natural gas reserves in 2006, a 10 percent decline from the previous year. Most of these reserves occur in three distinct areas: 1) associated fields in the UKCS; 2) non-associated fields in the Southern Gas Basin, located adjacent to the Dutch sector of the North Sea; and 3) non-associated fields in the Irish Sea. In order to take advantage of its domestic reserves, the UK government has encouraged the use of natural gas, including its substitution for coal and oil in industrial consumption and electricity production. As a result, natural gas consumption in the UK reached 3.4 Tcf in 2003. Further, the percentage of total energy consumption sourced from natural gas in the UK has increased from 20 percent in 1980 to 34 percent in 2003. In 2004, the UK was a net importer of natural gas for the first time since 1996.
The UK produced 3.6 Tcf of natural gas in 2003, about the same as the previous year, but a decrease from the peak of 3.8 Tcf in 2000. The country is the fourth-largest producer of natural gas in the world, behind Russia, the United States, and Canada. The largest concentration of natural gas production in the UK is the Shearwater-Elgin area of the Southern Gas Basin. The area contains five gas fields, Elgin (Total), Franklin (Total), Halley (Talisman), Scoter (Shell), and Shearwater (Shell). Most of the leading oil companies in the UK are also the leading natural gas producers, including BP, Shell, and Total. The major gas distribution companies in the UK, such as Centrica and BG Group, also have a presence in this production sector. Like the oil industry, smaller independents have been able to acquire some maturing assets from larger operators, who find it difficult to profitably operate these older, declining fields. Private companies control the UK natural gas sector, including production, distribution, and transmission. The largest gas distributor in the UK is now Centrica, a spin-off of the distribution assets of formally state-owned British Gas. National Grid Transeco (NGT), formed in 2002 through the merger of Lattice and former parastatal National Grid, controls the domestic gas transmission system.