MOSCOW (MRC) -- French energy company Engie has sold its British shale gas interests to petrochemicals firm Ineos for an undisclosed sum, reported Reuters with reference to the companies' statements.
Engie was one of the first big energy companies to back Britain's nascent shale gas industry when it bought parts of Dart Energy's licenses, a company since then taken over by IGas, in 2013.
Thursday's deal builds on Ineos' position as Britain's largest shale gas company as it now has access to a shale gas area of more than 1.2 million acres. The company, which recently moved its headquarters from Switzerland back to Britain, wants to invest 1 billion pounds into shale gas which it bets on as a feedstock for its petrochemicals business.
Engie, on the other hand, said its retreat from British shale gas was in line with its strategy to focus more on energy infrastructure, like gas pipelines, and services.
"The decision was made following ENGIE Group's strategic review notably in response to commodity price declines," said a spokeswoman. Global oil prices have halved since hitting a peak in mid-2014 and have also weighed on gas prices.
As part of the deal, Ineos is taking over Engie's entire UK onshore exploration license portfolio, that consists of interests in 15 licenses, including seven in which Ineos had a previous participation.
"We are always going to be interested in acquiring additional acreage," Gary Haywood, chief executive of Ineos shale, told Reuters on the sidelines of an industry event.
Large amounts of shale gas are estimated to be trapped in underground rocks and the British government says it wants to exploit them to help offset declining North Sea oil and gas output, create some 64,000 jobs and help economic growth.
But so far only one shale gas well has been fracked and progress has been slow over the past years due to regulatory hurdles and public protests. Environmental groups are concerned that fracking could contaminate groundwater and that it is incompatible with fighting climate change.
Shale gas fracking firms IGas (IGAS.L) and Cuadrilla confirmed the changes in license ownership in which they are also involved.
As MRC wrote earlier, Ineos, which owns and operates the Grangemouth petrochem refinery, has commissioned eight large-volume Dragon class ships to transport liquefied shale gas ethane from the US to Europe. At present, the company is building the biggest in Europe shale gas tank at Grangemouth. The building of Europe’s largest ethane storage tank is part of INEOS’ USD1 billion global project to bring US shale gas to Europe as supplies dwindle from the North Sea.
Ineos Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.