Sempra and INEOS sign Preliminary Agreement for LNG Supply

Sempra Infrastructure and INEOS Energy Trading announced they signed a preliminary agreement, also called Heads of Agreement (HoA), for the long-term supply of liquefied natural gas (LNG). The resource will come from Sempra's portfolio of LNG projects that are developed on the Gulf of Mexico.

The HoA between is an initial and non-binding document that establishes the basic framework for the project that consists of the commercialization of approximately 1.4MMtpa of LNG for 20 years. The LNG would be supplied from the Port Arthur LNG project or the Cameron LNG project at Phase 2. “INEOS is one of the largest end-users of natural gas in Europe and we look forward to establishing a long-term relationship with a company that shares our vision of increasing the world's energy security while promoting lower emission sources of energy,” commented Justin Bird, CEO of Sempra Infrastructure.

“We are very pleased to start a strategic relationship with Sempra Infrastructure, which has extensive experience in the construction and operation of LNG facilities. This agreement is an important part of our strategy as we build a network of liquefaction, transportation and regasification capacity to deliver affordable, cleaner and more reliable energy to our businesses and customers around the world,” said David Bucknall, CEO, INEOS Energy.

Sempra Infrastructure, created after the fusion of Sempra’s US-based LNG arm and its Mexican subsidiary IENOVA, is working to expand its LNG facilities on the US Gulf Coast through the simultaneous development of Port Arthur in Texas and the expansion of Cameron in Louisiana. INEOS now joins the growing portfolio of energy companies with whom Sempra recently signed HoAs, which includes the Polish RWE Supply & Trading.

Sempra’s recent success demonstrates a growing momentum for LNG export facilities, which can soon supply natural gas to companies and manufacturers all around the world. However, HoAs are preliminary agreements and LNG facility project development is subject to a few risks. These dangers include reaching definitive agreements, obtaining all necessary permits, signing EPC contracts, obtaining financing and making a positive final investment decision.