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Ineos buys LNG from US for supply and trade

1 December 2022

European energy company Ineos agreed December 1 to offtake at least 1.4mn metric tons annually for 20 years from Sempra’s Port Arthur LNG project planned in Texas. In July it signed a long-term capacity agreement with German LNG Terminal at Brunsbuttel although the LNG will have flexible delivery. Ineos’ first cargoes are due in 2027.

Ineos chairman Brian Gilvary said the deals secured the key areas of the value chain across the Atlantic corridor. “Long term supply from Ineos will help alleviate the structural energy issues in Europe,” the former BP CFO added.

Ineos says it is a first-mover among European corporates as it secures competitive sources of energy to meet its own needs and those of its customers in Europe, as part of the energy transition.

US LNG is typically priced off Henry Hub front month, plus a few dollars/mn Btu to cover construction costs, plus the cost of liquefaction — a small percentage of the Henry Hub price. Given its big cost advantage, US has become a major LNG exporter. The Port Arthur LNG project (site shown below) is a fully permitted facility.

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