INEOS confirmed a US$1.4bn investment to buy up US-based oil and gas assets from Chesapeake on Tuesday, after abandoning attempts to get UK rules on fracking relaxed.
Shortly after, INEOS agreed on a deal with Sempra Infrastructure to supply 1.4mln tonnes of liquified natural gas (LNG) each year, marking its entry into the market at a time when exports to Europe are also becoming ever more vital.
Entering the US market marks a “significant step” for INEOS, said chairman Brian Gilvary, both in terms of fracking operations and its production of LNG, which he hinted would be directed towards Europe.
“Long-term supply from INEOS Energy will help alleviate the structural energy issues in Europe,” he added, referencing a December deal for the US to supply at least 9bn to 10bn tonnes of LNG this year to combat the energy crisis.
INEOS bought 2,300 wells linked to the Eagle Ford shale basin in southern Texas from Chesapeake Energy, enough production capacity for 36,000 barrels of oil equivalent per day.
It had aimed to produce gas within the UK, including from its PEDL193 license which borders Old Trafford in Manchester and even runs underneath the club’s training ground in Carrington.
Fracking, the practice of pumping sand, chemicals, and water to harvest gas from underground shale rock formations has been banned in the UK since 2019, however, after AJ Lucas subsidiary Cuadrilla triggered small earthquakes near Blackpool following tests.
Despite having previously pushed the government to reverse the ban, INEOS has now seemingly turned its attention to the US.
“The government is not ready to move” on fracking, Gilvary added, “and if the option is we can go and frack in the US and move it to the UK, that’s what we’ll do.”