Ineos Completes Buy of Fracking Permits from IGas
Swiss-based petrochemicals mammoth Ineos has completed its planned purchase of shale gas exploration permits in England and Scotland from IGas and now claims to be the UK's third largest shale gas company.
Ineos is paying IGas £30 million in cash for the permits while also agreeing to fund a two-phase site development scheme expected to cost as much as £138 million. IGas will reimburse Ineos for its share of the scheme to Ineos when commercial production begins.
The deal includes the acquisition of a 50% share in seven IGas shale gas licenses England's northwest (the so-called Bowland licenses).
With the Bowland licenses, the petrochemicals group is picking up a 60% interest in three Petroleum Exploration & Development Licenses (PEDLs 145, 193 and EXL273) as well as a 50% interest in four additional licenses (PEDLs 147, 184, 189 and 190).
Ineos plans to assume operatorship of PEDLs 145 and 193 and EXL 273 in stages, along with the PEDL 133 Grangemouth license it has acquired from IGas in Scotland. The latter will give it 100% ownership of the franchise to frack the area surrounding its refinery and petrochemicals site of the same name located on the Firth of Forth.
Additionally, the company has secured an option to acquire 20% in two IGas shale gas licenses in England's East Midland (PEDLs 012 and 200).
While England's northwest has been a hotbed of opposition to hydraulic fracturing since two small earthquakes in 2011 were tentatively linked to shale gas drilling, protests are now gearing up in Scotland, where the regional government has declared a temporary moratorium on fracking.
Ineos has begun a series of town hall meetings in the Scottish franchise area in an attempt to convince skeptical local residents that the procedure is safe and not destructive to the environment. Fracking is expected to be a hot topic in the run-up to next year's Scottish Parliament elections.
