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INEOS Energy

INEOS Energy is committed to meeting society's energy needs through the current energy transition. Producing oil and gas, power and carbon credits. Supported by investment in LNG, Hydrogen and Carbon Capture and Storage.
5
min 2023

INEOS cannot survive without energy.

And neither can the world. Both rely on oil and gas to function. And they will do for years to come until governments and consumers are able to tap into a source of energy that is reliable, affordable and sustainable.

“Oil and gas companies can support this transition by providing alternatives, but they can’t make people buy electric cars or use less energy,” said David Bucknall, CEO of INEOS Energy and former head of BP’s global oil and low carbon trading businesses.

INEOS, which manufactures essential chemicals for the preservation of food and water, for clothing, medicines, electronics, cars, planes, buildings, wind turbines and solar panels, has used gas and oil for decades. As both a fuel and as a raw material.

INEOS also uses wind power and hydrogen to run some of its plants. Wood pulp and recycled plastic is also being used – instead of gas and oil – to make some of its products.

“If we can, we are doing it,” he said.

That transition is also one of the reasons why INEOS Energy was launched. The new business is designed to reflect the changing climate.

“This isn’t green washing,” said Brian Gilvary, who became chairman of INEOS Energy after he retired from BP.

“INEOS Energy is an exciting new business that incorporates all of the existing INEOS Oil & Gas assets and will also enable INEOS to become a powerful force in the coming energy transition.”

Hydrogen and renewable energy will both play a huge role in that transition.

INEOS has set out plans to develop ‘green hydrogen’ projects – using electrolysis and renewable energy – in Norway, Germany and Belgium, as well as the UK, which will also host the headquarters of its new hydrogen-focused unit.

What industry needs, though, says INEOS, is greater policy certainty from government.

“If the investment framework is in place, then investment tends to follow it,” he said. “Germany is very advanced. It has tax incentives and fiscal incentives which you need to create those investments.”

The German government recently awarded INEOS €770,000 to carry out a feasibility study into its plans to build and operate a new green hydrogen plant at the Verbund site in Koln – a move that could cut CO2 emissions by more than 100,000 tonnes per year.

“The funding decision shows the significance that the state attaches to our project,” said Dr Stephan Müller, Commercial Energy Manager at INEOS in Köln. “Water electrolysis for the production of green hydrogen is an incredibly important component of our ambitious sustainability agenda with the goal of reaching net zero by 2045.

Those plans, though, are only part of INEOS’ €2 billion Euro package of green hydrogen projects across Europe announced in October last year.

Prof. Dr. Andreas Pinkwart, Former Minister of Economics and Innovation, described the German project as an important step on the way to a climateneutral chemical industry in North Rhine-Westphalia.

“In the future, the project can supply not only the Köln Chempark but also logistics with green hydrogen,” he said. “We need precisely such holistic projects to be successful in the transformation.”

Up until 2015, INEOS had focused solely on chemicals.

But in October of that year, it ventured upstream for the first time.

It bought all the UK North Sea gas fields owned by the DEA Group, followed by Fairfield Energy Holdings Ltd’s 25% interest in the Clipper South platform. 

Months later, INEOS bought DONG Energy’s entire oil and gas assets in the North Sea for more than €1 billion and acquired the 235-mile Forties Pipeline System, which delivers about 40% of the UK’s oil and gas to the mainland.

They were landmark acquisitions and steered the company into new, exciting territory.

Acquiring DONG Energy’s assets has also meant INEOS Energy is now at the forefront of one of the most exciting projects in the world.

The Greensand carbon capture and storage project in Denmark has the potential to reduce the amount of CO2 emitted into the atmosphere efficiently and quickly.

In March, the INEOS-led Greensand project achieved a world first, proving to the world that Carbon Capture and Storage (CCS) can work, after carbon dioxide (CO2) from Belgium was successfully captured, transported cross border and stored under the Danish North Sea in a retired INEOS oil reservoir.

“It cannot stand alone, but it is an important tool if we are to solve the climate crisis,” said David.

He said the determination to seek alternative, cleaner sources of energy was high on INEOS’ agenda.

Each business has developed a roadmap – effectively an investment plan – to achieve net zero by 2050, while still remaining profitable and ahead of evolving regulations and legislation.

“Based on the roadmaps developed to date, we will achieve a reduction of over 33% by 2030, the one third marker on the road to net zero,” he said.

Its plans are also backed by investment.

Over €6 billion is currently being invested in a wide range of projects that will reduce INEOS’ CO2 footprint by harnessing the power of a natural gas that INEOS has been producing as a by-product for 100 years.

As Europe’s largest operator of electrolysis – the technology to produce hydrogen – INEOS is in a unique position to serve the hydrogen economy.

In the UK, the focus is on green and blue hydrogen.

Recently, INEOS also provided cornerstone funding for HydrogenOne Capital which was established to provide investors with opportunities in clean hydrogen and energy storage for the energy transition.

Despite the huge strides that INEOS is making, the company believes that natural gas will still play a huge part in life after 2050.

And it’s not alone in thinking that.

The Gas Exporting Countries Forum, an international governmental organisation made up of 19 member countries, believes natural gas will actually increase its share in the global energy mix from over 23% today to 27% in 2050 – not least because the
global population is set to rise by almost two billion to 9.7 billion by 2050, which will pile additional pressure on the demand for energy, food and materials.

“Natural gas will come out on top in the global energy mix,” said a spokesman.

It argued that despite ‘aggressive’ decarbonisation actions under the EU’s proposed Fit for 55 package, natural gas was still viewed as having a future.

Earlier this year The European Commission also said that natural gas and nuclear power had a role to play in the shift to a renewable-based future.

“It’s about time,” said Robert Bryce, author of A Question of Power. “The policymakers in Europe are finally embracing energy realism.”

More from INCH Magazine
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Captura y almacenamiento de carbono

INEOS has helped to prove to the world that CO2 can be safely captured, transported and injected into retired oil and gas wells under the seabed. On March 8th 2023 it achieved the world’s first cross border off-shore CO2 storage initiative intended to mitigate climate change. The successful trial saw CO2, captured from INEOS Oxide’s plant in Belgium and shipped 500 miles by Danish Shipping to INEOS’ Nini offshore oil platform in the Danish North Sea. There, the liquefied gas was injected into the retired oil reservoir 2km under the seabed. The INEOS-led Project Greensand was hailed as a big moment for Europe’s transition to a greener economy and the world’s understanding of carbon capture and storage. “You have shown that it can be done,” said Ursula von der Leyen, President of the European Commission in recognition of the Greensand project and the first injection event in Denmark on March 8. “You have shown that we can grow our industry through innovation and competition, and at the same time, remove carbon emissions from the atmosphere, through ingenuity and cooperation.” There to witness the historic moment was Denmark’s Crown Prince Frederik, Brian Gilvary, Executive Chairman of INEOS Energy, and Hugo Dijkgraaf, Chief Technology Officer at Wintershall Dea, which, along with INEOS, headed the consortium of 23 organisations involved in Project Greensand. “This project proves that carbon capture and storage is a viable way to permanently store CO2 emissions under the North Sea,” said Hugo. Anne H. Steffensen, CEO of Danish Shipping, said failure was not an option. “There is no way we could have failed on this,” she said. And the reason is simple. For carbon capture and storage is seen as critically important to help decarbonise the world’s energy and tackle climate change. The consortium of 23 partners is jointly led by INEOS. Project Greensand, as it is known due to the type of sandstone under the seabed, is the first time that the full value chain has been tested – and it is being done purely to protect the environment. “All the parts of the process had been developed and worked well in isolation,” said David Bucknall, CEO of INEOS Energy. “Connecting the parts and building the infrastructure was the challenge.” The plan now – following the successful trial – is to start operating commercially in 2025. Once fully operational, it should be able to store up to eight million tonnes of CO2 every year. There is immense pride within the company at being involved in such a ground-breaking project. Mads Weng Gade, CCO, Head of INEOS Energy Denmark, described it as a fantastic milestone in the fight against climate change.“I have been looking forward to this day for a very long time,” he said. “We have all shown true, pioneering spirit and worked hard to achieve this.” Many critics have argued that carbon capture and storage is unscalable, expensive and energy-intensive. But David, a former BP executive, said the project was based on proven technologies. “The pilot and development phases are about making them work together effectively,” he said. In December, the INEOS-led project received £22 million from the Danish government – the largest single grant ever awarded in Denmark. “Denmark has one of the most ambitious climate targets in the world and sees carbon capture and storage as one of the steps necessary to reach its goals,” said David. “This project will contribute significantly to Denmark's carbon reduction targets.” The project will also secure highly-skilled jobs. “It makes sense for the oil and gas industry to drive this new industry because they have many years of experience in this field,” said Mads. “We will be using the same infrastructure, the same geology and the same people who have detailed knowledge of these reservoirs.” Instead of dismantling oil rigs, they can be repurposed. Instead of gas flowing out, the process will simply be reversed to allow  carbon dioxide to be injected into the wells. INEOS’ long-term goal is to build a fleet of ships and CO2 storage facilities on land and a terminal so that the ships can dock, load the CO2 into containers and then sail out to the platform. “We anticipate Greensand to be competitive commercially once a commercial market for CO2 is up and running,” said David.

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