Ineos chiefs say a major deal to become the UK’s third biggest shale gas player is ‘good news’ for Teesside workers.
The chemicals giant, which employs around 250 on Teesside, has announced it is acquiring stakes in IGas’ shale gas licences in the North-west and, potentially, in the East Midlands.
The deal will give INEOS access to almost a quarter of a million acres of potential shale gas reserves, resulting in cheaper fuel long-term.
An INEOS spokesperson said: “Long term benefits of shale gas mean it can reduce prices and make all the INEOS plants more competitive.
“The sites in question are mainly in Scotland, the East Midlands and Runcorn.
“All INEOS plants are connected.
“Teesside will benefit, it’s good news; the bigger INEOS becomes in shale, the better for its other sites.”
INEOS is also acquiring IGas’ interest in the shale gas licence around Grangemouth in Scotland which will give the company 100% ownership of this asset.
Earlier this month, the company had warned Grangemouth was unlikely to have a long-term future unless a UK shale gas industry could be developed.
The company has bought at least a 50% interest in seven of IGas’ shale gas licences in the North-west, along with the option to acquire a 20% interest in two further IGas shale gas licenses in the East Midlands.
INEOS will pay IGas £30m in cash and has agreed to fund a two-phase work programme of up to £138m to appraise and develop the sites.
Gary Haywood, CEO of INEOS Upstream, said: “This is a further significant step for INEOS in its plan to become the biggest player in the UK shale gas industry.
“We believe shale gas could revolutionise UK manufacturing and INEOS has the resources to make it happen, the skills to extract the gas safely and the vision to realise that communities must share in the rewards for it to be successful.
“This is a great opportunity to acquire some first class assets that have the potential to yield significant quantities of gas in the future.
“INEOS believes that an indigenous shale gas industry will transform UK manufacturing, and that we can extract the gas safely and responsibly.
“We are pleased to have agreed this deal with IGas.
“INEOS’s scale, asset position across the UK, US shale gas expertise, and our expertise in managing oil and gas facilities will be a great match with IGas’s existing onshore asset base, and significant exploration and production capability.”
INEOS is one of a few companies able to use shale gas as both a fuel and a feedstock.
The company, which is the fourth largest chemicals firm in the world, has been building up a team of specialists in shale gas exploration and development, including some of the world’s leading experts.
On Teesside, the company’s controversial plans to store toxic waste underground near Billingham are still being considered, bosses confirmed last week.
Ineos Nitriles first announced it wanted to drill a 2.5-mile-deep hole to test if the earth beneath the firm’s Seal Sands site was suitable for storage of toxic waste water in February 2013.
Two years on and no geological test borehole has yet been bored.
But the firm has said the deep strata injection (DSIT) scheme is only one of four “long-term” options under consideration for its site.
Ineos is the world’s largest supplier of chemicals acrylonitrile and acetonitrile, for use in products from medicines to cars and computers.
Safety fears were voiced when the company applied to Stockton Council for planning permission to drill the test borehole in February 2013. Stockton South Conservative MP James Wharton called for a full public consultation, saying it was the first time the technology would be used in the UK, near a residential population. Ineos bosses say the DSIT technology has been used at the company’s US sites for more than 40 years and would reduce discharge into the Tees and air emissions.
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