Cheniere Energy, a prominent LNG supplier, and German chemicals company BASF have entered into a strategic agreement aimed at bolstering energy security and diversification. Under this agreement, BASF will purchase approximately 0.8 million tonnes per annum (mtpa) of liquefied natural gas (LNG) from Cheniere's Sabine Pass Liquefaction Expansion Project.

The LNG supply will be based on a free-on-board (FOB) arrangement, allowing for flexibility in transportation and distribution. The term of the agreement spans from mid-2026 to 2043, contingent upon a positive final investment decision concerning the Train Seven of the Sabine Pass Liquefaction Expansion Project, located in Louisiana, USA.

Cheniere's Executive Vice President and Chief Commercial Officer, Anatol Feygin, emphasized the crucial role that US natural gas plays in providing Europe with a dependable, sustainable, and cost-effective energy source. Feygin expressed that the agreement aligns with Europe's goals to ensure the stability of its energy supply chain.

The Sabine Pass Liquefaction Expansion Project is a substantial endeavor that aims to develop up to 20 million tonnes per annum of total LNG capacity, contributing to global LNG supply and reinforcing energy security.

BASF's Chief Financial Officer, Dr. Dirk Elvermann, highlighted the importance of establishing a dedicated LNG supply chain with Cheniere. He underscored that such diversification comes at a critical juncture as Europe's gas market witnesses heightened demand and fluctuating LNG prices. While BASF strives to reduce reliance on fossil fuels to achieve its net zero CO₂ emissions target by 2050, this LNG agreement provides a dependable and competitively priced natural gas supply.

Cheniere Energy has also been proactive in expanding its global presence, having previously inked a significant long-term LNG sale and purchase agreement with ENN, a leading Chinese natural gas company. This deal, secured in June 2023, involves the sale of 1.8 mtpa of LNG at a pricing structure linked to the Henry Hub natural gas spot price.