Petrochemical Giant INEOS Signs LNG Supply Agreement to Enter Global LNG Market

Previously, petrochemical giant INEOS was the first company in the world to transport ethane associated with shale gas to Europe from the United States, believing that ethane will drive a revival of European manufacturing. To that end, INEOS is investing $2 billion to divert U.S. shale gas to its manufacturing sites in Norway and Scotland.

Recently, European gas prices have doubled, and consumers are suffering from high gas prices. Ineos has entered into an LNG supply agreement to enter the global LNG market and ship US gas to Europe for sale.

INEOS Energy entered the global LNG market through an LNG agreement with Sempra Infrastructure in the United States. Under the agreement, Sempra will supply INEOS Energy with 1.4 million tonnes of LNG per year from its proposed North American facility over a 20-year period. The LNG will come from the proposed Port Arthur LNG Phase 1 project or the Cameron LNG Phase 2 project. The Port Arthur LNG Development Project is a 13.5 Mtpa fully licensed facility located on 3,000 acres in Jefferson County, Texas. Additionally, Sempra Infrastructure has signed an HOA with Cameron LNG Partners to develop the proposed 6.75-Mtpa Cameron LNG Phase 2 project in Hackberry, Louisiana.

INEOS Energy's entry into the global LNG market makes the company a first mover among European companies. INEOS intends to form partnerships with other industrial energy users in Europe to help them access similarly competitive energy. It is the first market entrant to operate in this way in years. “This agreement represents an important step forward in INEOS Energy’s journey at a time of major transformation in the energy industry. Our entry into the global LNG market opens up new opportunities to provide affordable, clean and reliable access to the market energy. INEOS Energy's long-term supply will help alleviate Europe's structural energy problems," said INEOS Energy Chairman Brian Gilvary.

Justin Bird, Executive Director of Sampra Infrastructure, said: "INEOS is one of the largest end-users of natural gas in Europe, and we look forward to building long-term partnerships with like-minded companies to advance low-carbon energy while enhancing the world's energy security. "The Framework Agreement demonstrates our continued drive to promote a new generation of LNG export facilities with an eye toward supplying the world's leading energy and manufacturing companies with U.S. natural gas."