Grangemouth owner Ineos buys North Sea fields

CHEMICALS giant Ineos has bought a major share of North Sea gas production in a deal that will see the company take control of fields that provide up to 8 per cent of the UK’s gas.

A general view of the Grangemouth plant. Owner Ineos has agreed to buy a major share of North Sea gas production. Picture: Michael Gillen

In a deal thought to be worth £500 million, the Swiss-based multinational, which owns the Grangemouth oil refinery and petrochemicals complex, will take over all the UK North Sea gas fields owned by the DEA Group, a German-based oil and gas firm owned by the LetterOne Group.

The deal represents the first acquisition of North Sea gas fields by Ineos.

The company said its decision to buy the fields was influenced by them being “well positioned, close to Ineos’ assets” in locations such as Grangemouth.

The 12 fields were sold in March by German firm RWE to LetterOne, which is controlled by Russian businessman Mikhail Fridman. They represent some 8 per cent of UK gas production and include the Breagh and Clipper South fields.

The UK Energy Secretary before May’s general election, Ed Davey, told LetterOne in April that it had to sell them again, saying it was not in Britain’s interests to have the fields at risk of sanctions against Russians.

Mr Davey had threatened to revoke the owner’s operating licence and said the sale had to take place by 20 October.

Ineos chairman Jim Ratcliffesaid the deal would boost the company’s key assets such as the Grangemouth plant and strengthen its position in the energy industry. He said: “We are pleased to acquire a strong portfolio of natural gas assets and bring on board a highly successful and experienced North Sea industry team.

“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.”

Mr Ratcliffe is thought to have expressed an interest in buying more North Sea fields as Ineos seeks to reinforce its position as a major force in the energy sector. The firm is also investing in onshore unconventional gas projects in the UK and has bought access to sites in Scotland for potential fracking – the controversial drilling technique used for extracting oil or natural gas from deep underground.

The company has acquired full fracking rights for a 330sq kilometres site in the Falkirk area as part of a deal worth £30 million with the UK’s largest shale gas developer.

It announced earlier this year that it would buy out the IGas interest in the shale gas licence, despite the Scottish and UK governments imposing a moratorium on the drilling technique.

The multinational has also invested heavily in the shipping, docking and processing sectors to bring fracked gas from the US to Grangemouth and to a Norwegian processing site as part of a £360m project.