Ineos buys fracking rights in central Scotland

If the moratorium is lifted, Ineos could pursue fracking opportunities in the Midland Valley. Picture: Michael Gillen

Announcing its latest step towards fracking in Scotland, Ineos, the Swiss multinational operator of the plant, said yesterday it will buy out IGas’ interest in the shale gas licence.

The deal – which covers 127 square miles – was agreed despite the Scottish and UK governments both imposing a moratorium on the drilling technique used for extracting oil or natural gas from deep underground. If the current restrictions are lifted, Ineos will have full control over fracking opportunities in an area of Scotland long associated with heavy industry.

Gary Haywood, chief executive of Ineos Upstream, said the latest acquisition was a “further significant step” by the petrochemicals giant towards fracking, which is credited with transforming the US energy industry over the past decade.

Mr Haywood said Ineos now held almost a quarter of a million acres of potential shale gas reserves across the UK as he announced extraction plans for Scotland and parts of England which could eventually see £138m invested if fracking is approved.

He said: “This is a great opportunity to acquire some first-class assets that have the potential to yield significant quantities of gas in the future.

“This is a further significant step for Ineos in its plan to become the biggest player in the UK shale gas industry.

“We believe shale gas could revolutionise UK manufacturing and Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that communities must share in the rewards for it to be successful.”

However, environmental campaigners last night reacted furiously.

Scottish Greens co-leader Patrick Harvie warned the company’s billionaire owner, Jim Ratcliffe, that he would continue to face opposition to his £360m project to bring shale gas ethane from the US to Ineos’ petrochemical plants in Scotland and Norway.

Mr Harvie said: “I’ve very little doubt that the pressure that built up for a moratorium will see a permanent and full-scale ban on unconventional gas extraction, although Mr Ratcliffe is welcome to waste his money if he wants to.”

Ineos could pursue fracking opportunities in the Midland Valley of Scotland – which includes the Grangemouth complex and a vast area around it – if the moratorium is lifted and the company is able to secure planning permission.

Under the terms of the deal, Ineos could also revive plans for gas extraction operations based around a series of wells testing for coalbed methane at Airth – a scheme which was opposed by local authorities in Falkirk and Stirling.

The acquisition of 100 per cent of the shale gas exploration licence by Ineos came after the company bought a 51 per cent stake last year for the area.

Other shale gas exploration licences in Scotland are held by IGas for a 183 square mile site in Dumfries and Galloway and a 249 sq mile area of North Lanarkshire, which Ineos part-owns, although councils have been instructed not to grant permits for exploration.

The UK and Scottish governments have also said no further licences will be issued until a series of investigations are carried out to assess the effects of the practice, which opponents have claimed can cause earthquakes, as well as creating the risk of poisoning drinking water sources.

Welcoming yesterday’s announcement, Scottish Conservative energy spokesman Murdo Fraser said: “There’s potential for fracking in Scotland, and that ought to be explored in an efficient and responsible manner.”

But Friends of the Earth Scotland’s head of campaigns, Mary Church, attacked the deal as a case of “musical chairs with fracking licences” and claimed the agreement between the companies would be frustrated by the moratorium on the technique.

A Scottish Government spokeswoman said: “Our moratorium and planned public consultation on unconventional oil and gas has received support from both industry and environmental NGOs.”