Cheniere Marketing has signed a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with German chemicals group BASF. 

Cheniere Marketing is a subsidiary of Houston, Texas-based LNG exporter Cheniere Energy.

Under the agreement, BASF will purchase up to 800,000 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 start in mid-2026 and is subject to a positive final investment decision on the first train of the Sabine Pass liquefaction expansion project (SPL) in Louisiana. The term of the SPA extends through 2043.

“This SPA demonstrates the critical role US natural gas plays in providing long-term secure, sustainable and affordable energy for Europe,” says 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.”

Dirk Elvermann, BASF‘s chief financial officer, adds: “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.”

The SPL expansion project is being developed to produce up to around 20 million tonnes of LNG per annum. 

In May 2023, Cheniere Energy Partners’ subsidiaries entered into a pre-filing review process for the project with the US Federal Energy Regulatory Commission under the National Environmental Policy Act.