Cheniere Energy’s subsidiary, Cheniere Marketing, has recently signed a long-term LNG sale and purchase agreement (SPA) with BASF, a renowned global leader in the chemical industry. This significant deal marks a crucial milestone in the energy sector, as it demonstrates the vital role of US natural gas in providing Europe with secure, sustainable, and affordable energy for the long term.
Under the terms of the agreement, BASF has committed to purchasing approximately 0.8 million tons per year (tpy) of LNG from Cheniere Marketing on a free-on-board (FOB) basis. The purchase price will be indexed to the Henry Hub price, complemented by a fixed liquefaction fee. Initial deliveries are set to commence in mid-2026. Moreover, upon the start of the commercial operations of Train Seven, the first train of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project) in Louisiana, the LNG purchase will increase to around 0.8 million tpy. The deal spans a substantial period, with the SPA remaining in effect until 2043.
Reflecting on this new partnership, Anatol Feygin, Cheniere’s Executive Vice President and Chief Commercial Officer, expressed satisfaction, stating, We are pleased to enter into this long-term relationship with BASF, a global leader in the chemical industry. Feygin further emphasized the role of US natural gas in Europe’s energy supply, referring to it as a stable, sustainable, and affordable source.
Dr. Dirk Elvermann, BASF’s Chief Financial Officer, highlighted the strategic importance of this agreement for BASF, stating that it allows the company to diversify its energy and raw materials portfolio, especially amidst significant changes in the European gas market. As the company strives to reduce its dependence on fossil fuels and achieve their goal of net-zero carbon emissions by 2050, this partnership ensures a reliable supply of natural gas at competitive terms.
The SPL Expansion Project, where the LNG supply will be sourced, is currently being developed to support a total LNG capacity of approximately 20 million tpy. The project’s timeline involves certain subsidiaries of Cheniere Energy Partners, L.P. entering the pre-filing review process with the Federal Energy Regulatory Commission under the National Environmental Policy Act, which began in May 2023.
This collaboration between Cheniere Energy subsidiary and BASF signifies a significant step forward for both companies. While BASF secures a reliable and competitive supply of natural gas, Cheniere strengthens its position as a key player in the LNG market. The agreement not only serves the commercial interests of these two entities but also contributes to Europe’s goals of energy stability and sustainability.
