The LNG will be purchased by the German company BASF from Cheniere on a free-on-board basis. Credit: Stephen Marrable from Pixabay.

Cheniere Energy, through its subsidiary Cheniere Marketing, has signed an agreement to supply liquefied natural gas (LNG) to German chemicals company BASF.

The agreement will see Cheniere supply about 0.8 million tonnes per annum (mtpa) of LNG to BASF. The LNG will be purchased by the German company on a free-on-board (FOB) basis.

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Cheniere will commence the LNG supply to BASF in mid-2026 and extend through 2043. This is subject to a positive final investment decision on the Train Seven of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project) in Louisiana, US.

Cheniere executive vice president and chief commercial officer Anatol Feygin said: “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.”

The SPL Expansion Project involves development for up to approximately 20mtpa of total LNG capacity.

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BASF chief financial officer Dr Dirk Elvermann 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.

“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.”

In June 2023, Cheniere Energy agreed on 20-plus year sale and purchase deal of LNG with Chinese natural gas company ENN.

Under the agreement, Cheniere will sell 1.8mtpa to ENN at a price fixed to the Henry Hub natural gas spot price.