The chemicals giant Ineos has announced that it plans to invest up to $1 billion (£640 million) in shale gas exploration in the United Kingdom as the country looks at becoming less dependent on foreign energy sources.
With the company itself planning on using gas at its chemicals plants as a raw material, this investment could see further shale gas projects across the country as it continues to gain traction as an important energy source.
Jim Ratcliffe, the Ineos chairman, said that he wanted them to “to become the biggest player in the UK shale gas industry” with “substantial further investment would follow if the company moved to development and production”.
Whilst currently building Europe’s largest shale gas import facility, Ineos wants to turn its attention to more localised energy sources and is thought to have applied for licences as part of the government’s ongoing onshore licensing round whilst also buying up the rights to explore hundreds of square miles of the Midland Valley.
When outlying its investment plans, Mr Ratcliffe said:
“I believe shale gas could revolutionise 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,”
The company has already announced plans to give £2.5 billion in shale gas revenues to communities surrounding its wells which will equate to around 6% of its revenues given to homeowners and land owners.
This sounds like a huge investment by Ineos but should they want a complete shale gas facility where they can extract it from wells from exploration right through to production, they will have to invest many millions more into it.
The timing of this announcement is very important as it comes just as the UK government is currently assessing applications made by operators for new onshore licences to explore for shale gas. Firms bidding for these licenses will have to prove they have the funds and the knowledge to successful frack for shale gas and more announcements like this could come from other firms in the industry in the coming months as they look to display their intent.
Fracking for shale gas is used extensively across the United States of America, where they are currently having an energy boom due to new discoveries of shale gas. There is hope in many quarters that this sort of move could revitalise Britain’s energy sector as well.
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