INEOS strikes key fracking deal with IGas
FRACKING firm IGas Energy has struck a major deal with global manufacturer INEOS, which will see the petrochemicals group invest up to £138m into UK shale gas projects.
INEOS is paying IGas £30m in cash up-front as well as funding work programmes, including seven projects in the North West in the Bowland basin.
In the North West, INEOS will acquire a 50% interest in IGas’ licences: PEDL, 147, 184, 189, and 190, and a 60% interest in IGas’ licences: PEDL 145, 193 and EXL 273 (known collectively, the “Bowland Licences”). The deal also includes a 20% investment in two sites in the East Midlands and 100% ownership of a project in Scotland.
Andrew Austin, chief executive of IGas, said: “We are delighted to announce this farm out with INEOS which underpins the quality, scale and significant potential of our licences, whilst retaining material upside in these key assets.
“Alongside the commitment from our existing partners, INEOS’s commitment of upfront cash and considerable capital investment will help fund us through the next steps of our shale appraisal and production programme.
“This transaction, together with our existing partnerships with Total and GDF, reinforces the potential and materiality of our portfolio to world class counterparties and strongly positions us as we seek to work together to unlock the potential of our untapped natural gas resources in Britain.”
Gary Haywood, chief executive of INEOS Upstream, added: “This is a great opportunity to acquire some first class assets that have the potential to yield significant quantities of gas in the future.
“INEOS believes that an indigenous shale gas industry will transform UK manufacturing, and that we can extract the gas safely and responsibly. We are pleased to have agreed this deal with IGas. INEOS’s scale, asset position across the UK, US shale gas expertise, and our expertise in managing oil and gas facilities will be a great match with IGas’s existing onshore asset base, and significant exploration and production capability.”