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Picture: 123RF
Picture: 123RF

Cheniere Energy said on Tuesday it had entered a long-term liquefied natural gas (LNG) supply deal with Germany’s BASF.

Cheniere signed up to  supply 800,000 tonnes per annum (mtpa) of LNG. Deliveries are expected to start in mid-2026 and only after Cheniere reaches a positive final investment decision with respect to the first train of the Sabine Pass project expansion. The LNG supply deal will extend through 2043.

The US has emerged as the world’s largest LNG exporter after Western sanctions on major supplier Russia left Europe scrambling to find alternate sources for the commodity.

Cheniere has also entered into supply deals with Norway’s Equinor and Korea Southern Power, as well as China’s ENN Natural Gas earlier this year.

“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,” said BASF CFO Dirk Elvermann.

“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,” he said in a statement to the market. 

Tuesday’s contract would also support Cheniere’s Sabine Pass LNG expansion in Louisiana, which is being developed for up to about 20 mtpa of LNG capacity.

Cheniere is the leading producer and exporter of LNG in the US, according to the statement. 

“We are pleased to enter into this long-term relationship with BASF, a global leader in the chemical industry,” said Anatol Feygin, Cheniere’s executive vice-president and chief commercial officer. “This SPA [sale and purchase agreement] 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.”

Deliveries are expected to start in mid-2026 and only after Cheniere reaches a positive final investment decision with respect to the first train of the Sabine Pass project expansion. The LNG supply deal will extend through 2024.

Reuters  

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