Ineos Energy said in a statement on Thursday that the agreement will deliver up to 0.5 mtpa of natural gas, which is enough to heat more than 500,000 homes for a year, roughly equivalent to the annual demand of a city the size of Manchester, Antwerp, or Cologne.
The company noted that Europe continues to face “tight supplies and volatile prices following years of under-investment and policy uncertainty.”
Ineos Energy is taking “practical steps to fix that by securing new, reliable energy flows from America.”
The agreement uses a Title Transfer Facility (TTF) netback pricing mechanism, which directly links the price of US natural gas sourced from Kinetik’s infrastructure to Europe’s benchmark gas market.
This tracks European market conditions while reducing exposure to supply shocks and wild price swings, according to Ineos.
Kinteics said in its third-quarter results report that the five-year LNG pricing agreement with Ineos at Port Arthur LNG will start in early 2027.
Under the contract, Kinetik will deliver residue natural gas at a designated interconnect on the Permian Highway pipeline, ultimately representing approximately 0.5 mtpa.
The gas will be priced monthly based on the European TTF index, offering Kinetik producer customers further diversification of natural gas pricing, it said.
Ineos LNG business
Ineos first entered the LNG sector in June 2022, signing a 20-year agreement with US LNG exporter Sempra Infrastruct.
The firm agreed to buy about 1.4 million tonnes per year of LNG for 20 years from Sempra Infrastructure’s Port Arthur LNG project in Texas.
Starting in 2027, Ineos plans to deliver these Port Arthur LNG supplies to the onshore LNG import terminal in Brunsbüttel, Germany, where it also booked long-term capacity.
The facility, developed by German LNG Terminal at the mouth of the Elbe on the North Sea, will have a capacity of 8 bcm of natural gas per year.
Last year, Gasunie and RWE made the final investment decision on the onshore LNG import terminal in Brunsbüttel backed by the German government.
Earlier this year, Ineos also signed a deal to supply natural gas to Germany’s Covestro.
Besides LNG supply and regasification capacity, Ineos also chartered two LNG carriers from Japan’s shipping giant MOL to ship its contracted US LNG supplies to Germany.