Cheniere and BASF Sign LNG Agreement

23.08.2023 - Cheniere Energy and BASF signed a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA).

Under the agreement, German chemical giant BASF will receive up to approximately 0.8 million t/y of LNG from Cheniere annually from mid-2026 through 2043, according to a statement. The purchase price will be indexed to the Henry Hub price, with a fixed liquefaction fee.

Cheniere is currently planning a significant expansion of its Sabine Pass LNG plant in Louisiana, touted as the largest in the US; however, a final investment decision is still pending. If Cheniere’s board votes to start construction of the first train of the Sabine Pass expansion, the annual amount of LNG sold to BASF will increase to 800,000 metric tons once the first train starts operations.

“We are pleased to enter into this long-term relationship with BASF, a global leader in the chemical industry,” said Anatol Feygin, Cheniere’s executive vice president and chief commercial officer. “This SPA demonstrates the critical role US natural gas plays in providing long-term secure, sustainable and affordable energy for Europe. With this agreement, we are supporting the objectives of one of Europe’s key industrial end-use consumers to ensure stability of its supply chain.”

“By establishing our own dedicated LNG supply chain with Cheniere, we are diversifying our energy and raw materials portfolio at a time of critical changes in the European gas market, which is marked by increased demand and volatile prices for LNG,” added Dirk Elvermann, BASF’s Chief Financial Officer. “While we are reducing our dependence on fossil fuels to reach our goal of net zero CO2 emissions by 2050, this agreement will ensure reliable supply of natural gas at competitive terms.”