BASF signs first LNG supply contract in its history – Kommersant
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The German chemical concern BASF has signed the first contract in its history for the supply of liquefied natural gas (LNG). Its supplier will be the American company Cheniere Energy, which informed about the deal.
Under the terms of the agreement, BASF will purchase 0.8 million tons of gas per year from Cheniere. The agreement is designed for 2026-2043. At the same time, as the American company notes, the deal will be activated only in case of a positive decision to increase investment in the Sabine Pass LNG plant in Louisiana. The German concern will buy liquefied gas at a price tied to the prices of the Henry Hub distribution center in Louisiana, plus BASF will pay a fixed price for liquefied gas.
BASF’s deal with Cheniere reflects the German government’s commitment to providing the country with a sufficient and stable supply of fuel after phasing out Russian gas. “By building our own dedicated LNG supply chain with Cheniere, we are diversifying our energy and feedstock portfolio at a time of critical change in the European gas market, which is characterized by increased demand and volatile LNG prices,” said BASF CFO Dirk Elvermann.
After the deal was announced, shares of both companies rose in price, with Cheniere shares rising 2.3% and BASF shares rising 0.4%.
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