Ineos Asset Stripping Largest Fracking Equipment Set In Europe
Links between chemical giant turned fracking company Ineos and a now bankrupt Polish fracking services company, raise the worrying prospect that Ineos is asset striping the company, to obtain equipment it needs to start fracking this country at knock down prices. The equipment in question includes 2 sets of kit for conducting hydraulic fracturing, as well as potentially a drilling rig and large amounts of seismic surveying equipment. Ineos has just submitted its first fracking planning application, at Marsh Lane in Derbyshire, and is also aiming to begin a seismic survey in the area within weeks.
Ineos differs from most small speculative fracking companies in the UK, having annual revenues in excess of $50 billion. Ineos has the largest set of fracking licences in the UK, covering 1.2 million acres and has been busy buying up whatever they need to begin fracking, including fracking experts and a variety of services. It has also been trying to buy community support but that will not be as easy to purchase. Given that Ineos’s own documents suggest plans for drilling 10 wells per square mile, which would translate into almost 20,000 wells in its licence areas, the communities it is threatening should be justifiably worried by a potential development which would put it in possession of more fracking equipment than Lancashire frackers Cuadrilla Resources.
It is worth noting that since creating Ineos Upstream to be a vehicle for its plans to exploit shale gas in the UK, Ineos also created a company called Ineos Upstream Services in March 2015. So far the only non-financial document linked to Ineos Upstream Services is an appendix in Ineos’s Notification of Seismic Surveys submitted to Nottinghamshire County Council on 5th May 2017. However a new CEO, Geoff Holmes, was appointed for Ineos Upstream Services in January and the company now appears to be active. It is standard industry practice to setup subsidiary companies to handle providing equipment and services to support it primary operations, e.g Cuadrilla Well Services Ltd in the case of Cuadrilla Resources. Ineos now appears to be attempting to build up the capacity to move from paper pushing and PR to planning applications and surveys, thus posing a serious threat to communities across the UK.
The Polish Connection
As mentioned in a previous article there are clear links between Arturius International, the military logistics company recently exposed as organising Ineos’s planned seismic survey, and United Oilfield Services (UOS) a company setup in Poland to provide well stimulation, well testing, drilling, and seismic data acquisition services to the fledgling Polish fracking industry. Arturius’s deal with UOS happened in the same month (March 2015) that Ineos signed a £30m deal with IGas, massively expanding its interests in fracking licence areas. Since then UOS has hit the rocks due to the failure of the fracking industry in Poland.
United Oilfield Services built up an extensive range of equipment, as well as experienced staff, during attempts by the fracking industry to exploit shale gas in Poland between 2010 and 2015. Since the failure of the fracking industry there, the threat to Polish communities has temporarily eased, but the fate of this equipment is a concern for communities threaten with fracking across Europe. While there are a lot of unknowns, a US-based dealer in “distressed” oil & gas industry assets, Kruse Asset Management, has listed 2 lots of UOS’s equipment for sale. One is UOS’s drilling rig which so far has not been sold, but the other is UOS’s entire inventory of hydraulic fracturing equipment which has been sold.
This hydraulic fracturing equipment includes 30 trailer mounted frac pumps and all the additional kit needed to equip 2 separate production scale hydraulic fracturing crews. It should be noted that in Ineos’s community presentation (PPT) the image of a set on frac pumps on slide 32 is of one of UOS’s frac pumps sets. Up until recently this equipment was stored at UOS’s logistics & storage base in Łowicz in central Poland. Now however the location of the equipment, along with the status of the base, where UOS was trying to downsize last August, is highly unclear. The amount of fracking equipment lying idle in the US makes the likelihood of the this equipment being shipped back across the Atlantic pretty low, and there is little demand for fracking equipment in other parts of Europe at present. The one logical destination for UOS’s equipment is the UK and Ineos is the company with both the cash and the connections to have acquired it.
Hydraulic Fracturing Equipment
UOS’s fracing equipment includes 30 Stewart & Stevenson FT-2251T 2,250 horsepower frac pumps, totaling 67,500 horsepower and enough auxiliary equipment, including manifolds, blenders and sand movers, to kit out 2 completely independent hydraulic fracturing spreads. In comparison Cuadrilla Resources has only 6 FMC WQ2700 2,700 horsepower frac pumps, totaling 16,200 horsepower. Cuadrilla’s kit is enough to fracture vertical wells like Preese Hall and the massively slowed down fracturing (1 frac stage a day) of the horizontal wells planned at Preston New Road in Lancashire.
However, for production scale hydraulic fracturing, 30-40,000 horsepower of pumps are needed, where completion of upward of 5 frac stages a day is standard. Of course it is not beyond the bounds of possibility that Cuadrilla has snapped up these frac pumps sets for themselves, but given that Ineos have far more spare cash and existing connections to UOS, its involvement seems far more likely. In any event the asset stripping of Polish companies by the UK fracking industry is an issue that bears careful scrutiny in the future.
Please get in touch if you have any information about the current location of UOS fracking equipment: firstname.lastname@example.org.
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