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Ineos has today completed a deal with independent oil and gas firm IGas to acquire a 50 per cent interest in seven IGas shale gas licences in the northwest of England.
As part of the deal, Ineos will pay IGas a cash sum of £30 million and provide up to £138 million funding for shale projects to develop the sites. IGas will reimburse its share of the work programme to Ineos upon commencement of commercial production.
The agreement also includes IGas’ Scottish shale site near Ineos’ Grangemouth refinery, and will see the chemicals giant take the remaining stake in the licence to give the company 100 per cent ownership.
Completion of the contract, announced in March, comes after all necessary consents and approvals were received by the Department of Energy and Climate Change (Decc).
Ineos chief executive Gary Haywood said: “Ineos believes that an indigenous shale gas industry will transform UK manufacturing, and that we can extract the gas safely and responsibly.”
“Ineos’ 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,” he added.
IGas chief executive Andrew Austin said: “We are delighted to have completed the transaction with Ineos and look forward to working with the Ineos team over the coming years.
“We now are operating on behalf of Total, GDF and Ineos, with a gross carried work programme of $285 million, to unlock the shale gas potential across the northwest and East Midlands.”
Early last year, prime minister David Cameron entrenched his support for shale gas, saying that Europe needs to “embrace the opportunities of shale gas” to ensure the continent “can benefit from the next phases of globalisation”.
The Green Party had previously accused the government of having a “creepily cosy” relationship with shale gas developers, after emails unearthed by Greenpeace showed government officials had collaborated with companies in their public relations work.
In January this year, Labour succeeded in banning fracking in groundwater protection zones, as well as 12 other environmental regulations added to the Infrastructure Bill.
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