Ineos May Apply for UK fracking licence

17.12.2013 -

Ineos chairman Jim Ratcliffe has said the company may apply to pursue shale gas exploration in the UK when the government begins awarding additional fracking licenses. However, no steps in that direction have yet been taken.

The British government has created an Office of Unconventional Gas and Oil to promote and regulate exploration. Without waiting for the country's gas rush to begin, the Switzerland-based former British chemical producer has drawn up plans to import shale gas-derived ethane from the U.S.

In an interview with the BBC radio and television network, Ratcliffe expressed the opinion that power from the new Hinkley C nuclear generator planned by the British government, developed by French utility EdF and backed financially by Chinese investors, will be too expensive for the manufacturing sector.

The UK government has negotiated a price of £92.50 (about €110) per megawatt hour (Mwh), guaranteed for 35 years, for energy produced by the new plant in Somerset. The facility is expected to meet about 7% of the UK's requirements. Ineos, Ratcliffe said, has privately concluded a deal with EdF to pay only €45 per Mwh.

A government official told the BBC the French energy giant had been offered "an investment rate" for electricity produced at the site that will cost £16 billion to build. A spokesperson for the World Nuclear Association pointed out that the UK government has been guaranteed a price locked in for 35 years, while the Ineos deal is "of unknown duration."