A serious pretender to the UK onshore shale gas crown has emerged.
Swiss giant Ineos, the group at the centre of the most serious industrial crisis in Scotland’s recent history when it threatened to close the Grangemouth petrochemicals plant, showed its hand this week as it moved to snap up a majority interest in the Midland Valley shale licence.
The purchase of BG Group’s 51% stake in PEDL 133 (the licence’s official name) for an undisclosed sum hands the group, headed by billionaire Jim Ratcliffe, the rights to explore for shale in an area extending to 329km2.
Just for clarity, PEDL 133 covers a heavily urbanised area stretching from a few miles west of the road bridge in the Firth of Forth to Stirling and includes all of Grangemouth, most of Falkirk and the whole of Alloa.
But before anyone gets their knickers in a twist about shale gas wells being bored in the middle of their street or the Wallace Monument being knocked down to get to an unconventionals seam underneath, the real target of PEDL 133 is the shale deposits contained in the old Clackmannan coalfield plays which were extensively mined in the 19th and 20th centuries before being abandoned.
Dart Energy which holds the other 49% of PEDL 133 has long had a presence at Airth, where it has been searching for another unconventional gas in the form of coalbed methane.
However, the firm currently the subject of a takeover bid by IGas Energy which is likely to go through at the start of next month has not engaged in hydraulic fracturing, the controversial method of shale gas production better known as fracking.
So far, so small scale.
But, as evidenced by the ruthless power struggle which engulfed Grangemouth last year, Ineos is not a company to do things by halves.
Their move to snap up PEDL 133 rights, which still requires the approval of the Department of Energy and Climate Change, could well signal a new era for shale in Scotland and the wider UK as a whole.
The company has already set up a new Upstream division to take forward its onshore oil and gas exploration ambitions and has brought together a team of shale specialists including a number of world-leading experts who cut their teeth during the maturing of the US shale sector to oversee developments.
As I write, progress is being made on a new terminal at Grangemouth to import, store and process shale from the US.
It appears that Ineos has now moved to identify and secure a localised supply of the same feedstock for its new facility, a move that would place it in a very rarified position indeed.
Ineos Upstream CEO Gary Haywood is certainly excited by the prospect, saying it was the “logical next step” for the producer.
“Ineos is well placed to be a major player in the UK onshore gas production sector,” he added.
In the UK shale gas Game of Thrones, it appears to me that Ineos has just laid down its pitch to sit upon the Iron Throne.