Ineos, owners of the Grangemouth refinery and petro-chemical, announced yesterday, 10th December 2013, that they intend to import shale gas from the USA.
This is just as we predicted in our recent late November series of eight researched pieces on the oil and gas industry, the North Sea and Scottish independence.
This creates an ironic picture with serious implications for production in the North Sea and for consequent government revenues.
This consequence is not, of course, any responsibility of Ineos.
It was agreed during the collapse of the ill-considered Unite strike at the plant that the Scottish and UK governments would together help to fund – through grants and underwriting a hefty part of a major loan - the construction of a shipping berth at Grangemouth.
This will now see a government funded berth supporting Grangemouth in importing LNG from the USA shale fields – a direct competitor for North Sea oil.
The particular concern here has to be Apache’s muscular and successful investment in the Forties Field – they say ‘everything that moves has been replaced or repaired’.
Apache also commissioned from Tyneside and saw into service in the Forties field in the summer of this year, 2013, a new FPSO [Floating Production, Storage and Offloading] platform.
A large proportion of Forties oil comes through the Forties pipeline direct into BP’s facility at Kinneil at Grangemouth.
Demand from Grangemouth for Forties field output will necessarily be impacted negatively by its ability to import cheaper and sweet crude shale oil and gas from the USA’s burgeoning shale fields of the Bakken and Eagle Ford.
The cost to Grangemouth of the USA’s LNG from shale will be 50% less than gas from the nearby North Sea, even including the import costs.