(Platts) – Switzerland-based petrochemical company Ineos is to invest an initial $1 billion in exploring for shale gas in the UK, the company said Thursday at a press conference in London.
Ineos already owns two licences to explore for shale gas in Scotland and is seeking several more across the UK as it hopes to become the biggest player in the UK shale gas industry, in terms of both gas output and exploration.
“I believe shale gas could revolutionize UK manufacturing and I know Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards,” said Ineos Chairman Jim Ratcliffe.
The company said “substantial further investment” could follow if the company moved into development and production.
Ineos expect to hear the outcome of its license applications in February or March 2015 and is planning on drilling “a few wells in Scotland next year” on already granted licenses, CEO of Ineos upstream Gary Haywood said.
As well as owning the rights to explore for shale gas in Scotland, Ineos is set to become the first company to import US ethane into its petrochemical site at Grangemouth in Scotland.
It has signed a 15-year contract with shale gas producers in the US and aims to be self-sufficient on UK gas by the end of this time.
Ineos has invested GBP400 million ($626 million) to bring shale gas into Scotland, including commissioning a fleet of 15,000 mt cryogenically cooled ethane tankers.
The new licenses it has applied for will be to explore in locations that either have a mining or industrial heritage and it has pledged to give 6% of any revenues generated to local communities, the company said, adding that this could amount to GBP375 million.
Ineos has for years lobbied the UK government to encourage companies to drill for shale gas — often pointing to the US shale industry as an example of how cheap gas can revive the manufacturing sector.
Gas prices in the US have slumped 75% in the past few years as production of shale gas has soared.
According to Ratcliffe, this has triggered a $150-billion investment boom in the US petrochemical industry, which turns ethane into ethylene — the major chemical building block for plastics.
By Andrew Allan, Jonathan Marshall. Edited by Jonathan Dart
