INEOS Energy has entered the global LNG market, having today (22nd June) inked an agreement for the potential purchase of 1.4 million tonnes per annum from the US.
Under terms of a heads-of-agreement, Sempra Infrastructure could supply INEOS with the natural gas from either its proposed Port Arthur LNG Phase 1 project, located in the Gulf of Mexico, or the Cameron LNG Phase 2 project in Louisiana.
The deal comes as more countries are boycotting the supply of one of Russia’s biggest exports by increasing energy independence, as a result of the invasion of Ukraine. With 40% of gas consumed in the EU supplied by Russia, the EU’s nation states have been and – in certain cases – continue to be heavily reliant upon Russian gas.
Commenting on the deal, Brian Gilvary, Chairman INEOS Energy said, “This agreement represents a major step forward in the INEOS Energy journey, at a time of significant transformation in the energy industry.”
“Our entry into the global LNG market opens new opportunities to supply affordable, clean and reliable energy to the market. Long-term supply from INEOS Energy will help alleviate the structural energy issues in Europe.”
Just last month (May 2022), the European Commission released its REPower EU plan to make Europe independent of Russian fossil fuels by 2030, which the EU states are being wielded as an ‘economic and political weapon’ by the country.
In addition to increasing energy security for Europe and Ukraine, the plan aims to advance diversification of energy supplies and the investment of renewables to accelerate the green transition.
Now, as a major play in the US LNG market, Sempra Infrastructure, and companies alike, are set to see increased demands for its products.
Justin Bird, CEO of Sempra Infrastructure, added, “INEOS is one of Europe’s largest end-users of natural gas and we look forward to building a long-term relationship with a company that shares our vision of increasing the world’s energy security while simultaneously advancing lower-carbon energy sources.”
“This heads-of-agreement demonstrates our ongoing momentum in advancing our next generation of LNG export facilities with an eye toward supplying US natural gas to some of the world’s leading energy and manufacturing companies.”
The signed agreement is a preliminary non-binding agreement, and the development of the Port Arthur LNG and Cameron LNG Phase 2 projects are subject to securing all necessary permits, signing engineering and constructing contracts, obtaining financing and a final investment decision.