Chemicals giant Ineos has announced plans to invest £640m in shale gas exploration and appraisal in a move which could make it the biggest player in the industry in the UK.
The Swiss-based company already has two licences near its plant at Grangemouth in Scotland but is applying for more in Scotland and the North of England.
Chairman Jim Ratcliffe said he wanted Ineos to become the biggest company in the British shale gas industry.
“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.”
Hydraulic fracturing, or fracking, involves pumping water, chemicals and sand at high pressure underground to fracture shale rock and release gas.
The two licences Ineos already have comprise over 120,000 acres, while the company is also investing £400m on a project to bring US shale gas to Grangemouth. Ineos has announced it will give local communities 6 per cent of the revenues from any shale gas it produces, worth an estimated £375m.
Gary Haywood, chief executive of Ineos Upstream said: “We believe our knowledge and experience in running complex petrochemical facilities, coupled with the world class sub surface we have recently added to our team, means that Ineos will be seen as a very safe pair of hands.”
Prime Minister David Cameron believes fracking “will be good for our country” and blamed “a lack of understanding” for opposition to the process.
Environmental groups attacked the announcement.
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.”
Mr Ratcliffe told a news conference in London that the 6 per cent revenue offer to local communities was “generous” and could be worth up to £400m over 15 years.
He conceded that some people could become millionaires, adding: “That’s fine.”
He said manufacturing in the UK had “collapsed” and needed a boost such as cheaper energy from shale gas.
“It could be the saviour of manufacturing,” added Mr Ratcliffe, a chemical engineer turned industrialist who is reckoned to be one of Britain’s richest men.
Ineos has sales today of around $47bn.
Mr Ratcliffe grew up in Yorkshire and attended Beverley Grammar School.