US LNG exporter Cheniere has signed a long-term deal to supply liquefied natural gas to German chemicals giant BASF.
Under the SPA, BASF has agreed to buy up to 0.8 million tonnes per annum (mtpa) of LNG from Cheniere Marketing on a free-on-board (FOB) basis, according to a statement by Cheniere.
In addition, the Henry Hub-indexed deal includes a fixed liquefaction fee.
Cheniere said deliveries will start in mid-2026 and, subject to a positive final investment decision with respect to the first train of the Sabine Pass liquefaction expansion project in Louisiana, will increase to about 0.8 mtpa upon the start of commercial operations of the seventh train.
Also, the term of the SPA extends through 2043, the LNG exporter noted.
“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,” Anatol Feygin, Cheniere’s executive VP and chief commercial officer, said.
“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,” Dirk Elvermann, BASF’s chief financial officer, said.
“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,” Elvermann said.
Sabine Pass expansion
Both of these contracts include volumes from the proposed Sabine Pass Stage 5 expansion project.
Sabine Pass currently has a capacity of about 30 mtpa following the launch of the sixth train in February last year, while Cheniere’s three-train Corpus Christi plant in Texas can produce about 15 mtpa of LNG and is undergoing expansion.
In February this year, Cheniere initiated the pre-filing review process with the US FERC for the Sabine Pass Stage 5 expansion project.
The project will include up to three large-scale liquefaction trains, each with a production capacity of about 6.5 mtpa of LNG, a boil-off-gas (BOG) re-liquefaction unit with a production capacity of 0.75 mtpa of LNG, and also two 220,000-cbm LNG storage tanks.