Ineos buys 12 offshore gas fields as Scottish shale remains out of reach

Grangemouth petrochemical plant
Source: Richard Webb @ Wikicommons

In an apparent bid to hedge natural gas supplies for their petrochemical business, the Swiss chemical giant and the owner of the Grangemouth plant, Ineos has acquired offshore gas fields Breagh and Clipper South in the North Sea.

In a deal thought to be worth £500 million, the properties were purchased from Russian billionaire Mikhail Fridman’s investment fund LetterOne, who was forced to sell following the imposition of international sanctions against Russia.

The UK Energy Secretary before May’s general election, Ed Davey, threatened to revoke the operating licences for the twelve fields which LetterOne bought from the German utility firm RWE, saying that it was not in Britain’s interests to have the fields – which represent some 8 per cent of UK gas production – at risk of sanctions against Russia.

Ineos Chairman Jim Ratcliffe said: “Ineos has been very open about its intention to make strategic investments in the North Sea and this acquisition is our first step in fulfilling this goal. It will also help our UK petrochemical assets to have ongoing access to competitive energy.”

Ineos has bet hard on British shale, acquiring full fracking rights for a 330sq kilometres site in the Falkirk area, Scotland, as part of a deal worth £30 million with the UK’s largest shale gas developer. The company’s interests in this respect have been jeopardised by the moratorium on hydraulic fracturing imposed by the Scottish government earlier this year.

It’s been recently reported that Ineos has secured its presence at the Scottish National Party (SNP) conference in an attempt to influence the country’s unconventional hydrocarbons policy and legislation. There is no indication that their efforts have paid off in any way with Scotland widening its moratorium on shale gas to include underground coal gasification (UCG) last week.

Ineos’ biggest obstacle on the way to producing shale gas in Scotland is the strong, grass-root opposition to fracking. In a most recent development, thousands of people joined hands along the Forth Road Bridge yesterday to take a stand against the practice of Underground Coal Gasification (UCG) in Scotland.

Although the Scottish Government had announced a moratorium on the drilling just last week, it was announced a day later that test drilling would be allowed to take place, which spurred the demonstrators to action.

Director of Friends of the Earth Scotland Richard Dixon told The National: “I think that test drilling is a very dangerous potential loophole, as the public are being told there is a moratorium, but it seems someone could turn up at the end of your garden and start drilling a hole.”

He added: “I think the government have made a mistake to allow anything to happen while a moratorium is in place.”

Officially, Ineos bosses say that they remain confident that the ban will be lifted, adding that they still “remain supportive” of the Scottish Government.

Image: Ineos’ Grangemouth petrochemical plant.

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