BG Group has emerged as a secret backer of a tiny energy company that has won the right to search for gas in disused coal fields across Scotland’s Central Belt.

Composite Energy, run by Keith Lough, the former British Energy finance director, was awarded rights to explore for coal bed methane last week.

BG owns a 10% stake in the Stirling-based business. Other backers include Stanley Fraser, the founder of Aberdeen-based engineering firm Hydrasun, which has a 25% stake.

Composite already owns the rights to drill for gas in coalfields to the east of Stirling, near Longannet power station.

Following last week’s auction of onshore gas exploration rights by the Department for Business Enterprise and Regulatory Reform, Composite has been granted rights to a further 21 exploration blocks, including a a bigger area of west Fife and parts of Yorkshire and Wales.

Aim-listed Island Gas won further acreage in last week’s auction, and is due to begin production from a site between Widnes and Warrington by the end of this year.

The companies are both searching for methane gas trapped in coal fields. Coal deposits with high methane content were often deemed to dangerous to mine because of the risk of explosion. New technology in use in America and Australia allows the methane to be separated from the coal and extracted.

The gas is of the same quality as that pumped from the North Sea and can be fed straight into the gas network.

BG’s involvement in the coal-bed methane project comes amid its continuing attempts to buy Australia’s Origin Energy — a specialist in coal-bed methane technology. Origin rejected a £6.6 billion bid last week.

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