Ineos acquires major interest in Scottish shale gas licence

Ineos Upstream Limited has signed an agreement with Reach Coal Seam Gas Limited (Reach CSG) to acquire an 80% interest in PEDL 162, in Scotland.

This licence area of 400 km² is next to Petroleum Exploration and Development Licence 133, in which Ineos already owns a 51% stake of the shale layer. As part of the deal, Ineos will be the operator of the licence, and will fund the initial appraisal activity (consisting of two vertical science wells and 100 km² of 3D seismic).

The deal is subject to relevant regulatory approvals, and is expected to complete within the next few weeks.

The British Geological Survey (BGS) has identified significant shale gas and oil resources in this area via the recent Midland Valley of Scotland report. The key objective of the first phase of appraisal is to determine whether these resources can be economically extracted.

Ineos Upstream CEO, Gary Haywood commented: "I am delighted to have concluded this deal in Scotland, which is a very good fit with our existing licence interest in the adjoining PEDL 133. We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from this area.

“If we can, it will provide a local source of competitive energy and raw materials to support manufacturing jobs in Scotland. Our recent commitment to share the benefits of the gas production with the landowners and the community will also bring significant local benefits."

Specialists from Mitchell Energy, the company credited with perfecting shale gas extraction in the USA, are currently working with Ineos in the UK. Nick Steinsberger, Kent Bowker and Dan Steward have been working in shale gas extraction since the 1980s, and are regarded as leaders in their field. The team that pioneered the most effective method for safely extracting shale gas in the Barnett Shale in America, are now working with Ineos’ own on-shore gas exploration team.

Haywood added: "The former Mitchell Energy team were among the pioneers of the shale gas revolution in the US, and they bring a vast experience of successful shale gas production from various areas of the US. We are confident that our US team, together with our own experts, can safely and efficiently develop a successful business in Scotland, which will play a part in securing the energy supply of Scotland and the UK, and will bring significant economic benefits to the country and to the community.”

Adapted from press release by Katie Woodward

Read the article online at: https://www.worldpipelines.com/business-news/14102014/ineos-acquires-shale-gas-interest-in-scotland-103/