£640m Shale Gas Exploration Plan Unveiled

Chemicals group Ineos is to invest £640m in shale gas exploration and production in the UK.

The move could make it the biggest player in the industry in the UK.

Ineos is applying for more licences in Scotland and the north of England, in addition to its existing licences near its refinery at Grangemouth in Scotland

The company had previously announced its intention to produce shale gas for Grangemouth,

The plant was threatened with closure in 2013 because of an industrial dispute.

But Ineos says it has invested £300m as part of a long-term survival plan and this summer announced its future had been secured with the help of a £230m Government loan which would allow it to raise funds to invest in a new terminal to import, store and process ethane from shale gas as North Sea supplies dwindle.

The ethane tank will be the largest in Europe and the company said it would protect thousands of jobs by ensuring the long-term future of petrochemical manufacture at Grangemouth.

Shale gas production has helped bring about a reduction in world gas prices but the process is hugely controversial and has sparked protests at several sites across the UK.

The gas is extracted through a technique known as fracking, in which water and chemicals are injected into rock at high pressure.

Ineos Chairman Jim Ratcliffe said: "I believe shale gas could revolutionise UK manufacturing and I know Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards."

The two licences Ineos already have comprise more than 120,000 acres, while the company is also investing £400m on a project to bring US shale gas to Grangemouth.

The company has said it will give local communities 6% of the revenues from any shale gas it produces, worth an estimated £375m.

Simon Clydesdale, energy campaigner at Greenpeace UK, said: "Investment is essential to transform our energy system, but not giant speculative bets on unproven and risky resources.Ineos have jumped on a spin-powered bandwagon which is going nowhere.

"Independent academics recently called out Government ministers over the ludicrous levels of hype around shale gas, saying 'shale gas has been completely oversold'.

"It seems that Ineos have based their business plan on breathless PR brochures rather than scientific reports."