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Chemical group Ineos bets $1 billion upstream in UK shale gas

Ineos to feed Grangemouth with Scotland shale gas

Introducing itself as “THE WORD FOR CHEMICALS”, the Swiss-based company Ineos is maneuvering a strategic breakthrough in planning $1 billion capital expenditure in UK shale gas to feed its petrochemical complex in Grangemouth, Scotland.

Acquired from BP willing to focus on upstream activities, the Ineos Grangemouth refining and petrochemical complex occupies a sensitive position as it supplies 70% of the transportation fuels consumed in Scotland.

Ineos_Grangemouth_Scotland_UK_Shale_Gas_Project_MapFighting for survival among the European refining over-capacities, this Ineos Grangemouth complex is now facing the competition from the North American petrochemical industry taking advantage of the shale gas lower prices compared with North Sea conventional gas.

With operations on both sides of Atlantic, Ineos intents to remain a global player and preserve its European footprint.

In this context, Ineos and Unite union managed to find a deal to align Grangemouth on US labor costs.

Ineos also decided to invest in a liquefied natural gas (LNG) import terminal to secure competitive feedstock from US

After completing ethylene expansion in Chocolate Bayou in Texas, USA, Ineos is working on the next step to boost its Grangemouth refining and petrochemical complex with the opportunity to develop the shale gas in UK since this country is willing to take the lead in Europe in the exploration of this unconventional resources in the same way that UK has become a global leader in deep offshore technologies from its North Sea fortune.

Ineos submitted additional applications to UK DOE

While announcing its intention to invest $1 billion in shale gas fields development, Ineos submitted additional applications to the UK Department of Energy & Climate Change (DOE) for new licences.

From the analysis performed by the British Geological Survey, the Midland Valley in Scotland may hold 80 trillion cubic feet (tcf) of gas and 6 billion barrels of oil, but there is still uncertainty about the percentage of recoverable reserves from these unconventional resources.

Ineos_Grangemouth_Scotland_UK_Shale_Gas_ProjectAfter recruiting shale gas experts from the US, Ineos started to acquired licenses in different blocks proposed by the UK Government.

In August 2014, Ineos took 51% of the 127 square mile Petroleum Exploration and Development Licenses (PEDL) 133 including Grangemouth, Falkirk and Stirling areas.

In October 2014, Ineos bought 80% of the 154 square mile PEDL 162 adjacent to the Block 133 on ots east side.

Proposing significant incentive to the local inhabitants, Ineos is willing to share profits in order to speed up the development of these unconventional resources for which it is planning to drill hundreds wells over the next five to six years.

Due to start first shale gas exploratory operations in 2015, Ineos is then preparing additional investment for the gas treatment and production in the UK by 2020.

For more information about oil and gas and petrochemical projects go to Project Smart Explorer

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