Chemicals giant Ineos has announced plans to invest £640 million in shale gas exploration and appraisal in a move which could make it the biggest player in the industry in the UK.
The 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.
Environmental groups attacked the announcement.
Shale gas is extracted through a technique known as fracking, in which water and chemicals are injected into rock at high pressure. The process is hugely controversial and has sparked protests at several sites across the UK.
Earlier this year, the owners of the giant terminal at Grangemouth secured a £230million loan guarantee from the UK government to build a new facility to import shale gas.
Energy Minister Matt Hancock said: “It is good news that Ineos want to invest in extracting UK shale gas. Ineos is a major company with serious intent and the confidence to make the most of this domestic energy supply.
“Extracting domestic shale gas has the potential to create jobs, make us less reliant on imports from abroad and help us tackle climate change, all within one of the most robust regulatory regimes in the world.”
The pressure group Greenpeace accused Ineos of jumping on a “spin-powered bandwagon” following 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.”
The two licences Ineos already have comprise over 120,000 acres, while the company is also investing £400 million on a project to bring US shale gas to Grangemouth.
Ineos has announced it will give local communities 6% of the revenues from any shale gas it produces, worth an estimated £375 million.
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.”