Cheniere Energy’s subsidiary, Cheniere Marketing, has signed a long term LNG sale and purchase agreement (SPA) with large German chemical combine, BASF.
Under the SPA, BASF will purchase up to 0.8 mill tonnes per annum of LNG from Cheniere Marketing on a free-on-board (FOB) basis. The price is indexed to Henry Hub, plus a fixed liquefaction fee.
Deliveries will initially commence in mid-2026 and, subject to a positive final investment decision (FID) on the first train (Train seven) of the Sabine Pass liquefaction expansion project (SPL) in Louisiana, will increase to around 0.8 mill tonnes upon the start up of Train seven’s commercial operations.
The term of the SPA extends through 2043.
“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 CCO.
“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 Dr Dirk Elvermann, BASF’s CFO.
“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,” he said.
The SPL expansion project is being developed to produce up to around 20 mill tonnes per annum total LNG capacity.
In May, 2023, Cheniere Energy Partners’ subsidiaries entered into the pre-filing review process for the project with the US Federal Energy Regulatory Commission (FERC) under the National Environmental Policy Act (NEPA).
