British company INEOS Energy, a division of INEOS Group (INEOSE.UL), announced on Wednesday that it had reached an agreement with American company Sempra Infrastructure for the supply of 1.4 million tonnes of liquefied natural gas (LNG) annually from North America for 20 years.
With the amounts planned for both trading and providing INEOS’s own industrial needs in Europe, it signifies INEOS’s entry into the worldwide LNG market. According to INEOS Energy, the LNG will be delivered free-on-board from either the Cameron LNG Phase 2 project or the projected Port Arthur LNG Phase 1 project in the U.S. Gulf.
The two LNG projects must still get all required permissions, engineering and construction contracts, obtain funding, and make a final investment decision before the agreement becomes final and enforceable.
The long-term supply arrangement with INEOS Energy comes as Europe looks for alternate gas sources and secure supplies in the face of declining Russian gas shipments. Poland’s PGNiG (PGN.WA) and Sempra also agreed to a 20-year LNG supply agreement in May.
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