Cheniere, BASF Sign Long-Term LNG Deal

The deal is expected to support the LNG producer's Sabine Pass Liquefaction expansion project.

Artistic rendering of Cheniere Energy's expanded Sabine Pass LNG terminal.
Source: Cheniere Energy

Cheniere Energy and BASF announced a new sale and purchase agreement (SPA), under which the German chemicals group will purchase 0.8 million tonnes per annum (mtpa) of liquefied natural gas (LNG) from Cheniere Marketing on a free-on-board basis for a 20-year period. The purchase price for the LNG will be indexed to the monthly Henry Hub price plus a fixed liquefaction fee.

Deliveries are expected to commence in mid-2026 and are subject to a positive final investment decision for the first train of the Sabine Pass Liquefaction (SPL) expansion project in Louisiana, Cheniere said in a statement. The terms of the agreement extend through 2043.

“This SPA demonstrates the critical role US natural gas plays in providing long-term secure, sustainable, and affordable energy for Europe,” said Anatol Feygin, Cheniere’s executive vice president and chief commercial officer.

“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,” he added.

Dirk Elvermann, BASF’s chief financial officer, said that, by establishing the company’s own dedicated LNG supply chain with Cheniere, BASF is “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.”

He noted that, while BASF is reducing its dependence on fossil fuels to reach its net zero CO2 emissions goal by 2050, the agreement with Cheniere will “ensure a reliable supply of natural gas at competitive terms.”

For Cheniere, this deal caps off a busy summer for one of the largest LNG producers in the US. In May, the company signed a long-term SPA with Korea Southern Power. In June, Cheniere signedtwo additional long-term deals with Norway’s Equinor and another with China’s ENN Natural Gas.

The Sabine Pass LNG terminal, located in Cameron Parish, Louisiana, first came online in 2016. The facility consists of six liquefaction trains with a total LNG production capacity of about 30 mtpa. The terminal also has operational regasification facilities that include five LNG storage tanks, vaporizers, and three marine berths.

The SPL expansion project includes up to three LNG trains with an expected total LNG production capacity of approximately 20 mtpa. In February 2023, Cheniere initiated a prefiling review process with the Federal Energy Regulatory Commission (FERC) under the National Environmental Policy Act.

The company is targeting project construction to begin in the fourth quarter of 2025, with a complete project in-service date expected for the second half of 2032, according to its filing documentation with FERC.