The German BASF and the American Cheniere reach a long-term agreement for the import of Gan Naturale Liquefied
The largest US producer of liquefied natural gas (LNG), Cheniere Energy, has struck a deal with Germany's BASF SE to supply the chemical giant with 0.8 million tonnes per year (mtpa) of LNG.
The agreement provides for the purchase of a minimum of 800 thousand tons of LNG by BASF and is linked to the construction of "Train 7" the "Train 7" of the Sabine Pass liquefaction plant. The price is indexed to the US Harry Hub. Usually these agreements are for twenty years. Interesting that BASF does not consider abandoning gas for the long term, despite all the Green objectives…
The deal with BASF is one of several long-term supply contracts Cheniere has signed this year. In June, Cheniere signed a long-term LNG sale and purchase agreement with China's ENN Energy Holdings. Under the terms of the agreement, ENN will purchase approximately 1.8 million metric tons per year of LNG on a free-on-board basis at Henry Hub prices over a 20-year period, with deliveries commencing in mid-2026 for then increase to 0.9 million tonnes per year (mtpa) in 2027.
The agreement is conditional on the completion of Cheniere's Sabine Pass project, which is being developed to include up to three liquefaction trains with an expected total production capacity of approximately 20 million tonnes/year of LNG. Last year, ENN signed a 13-year agreement with Cheniere to purchase 900,000 metric tons annually, also based on Henry Hub prices.
Sabine Pass
Currently, Sabine Pass has six fully operational liquefaction units, known as "trains", each capable of producing approximately 5 tons per year of LNG, for a total nominal production capacity of approximately 30 tons per year. Cheniere transforms over 133 million cubic meters of natural gas per day into LNG. Sabine Pass has multiple interstate and intrastate pipeline connections and is located less than four nautical miles from the Gulf of Mexico, providing easy access for marine vessels.
Also in June, Cheinere entered into another LNG sale and purchase agreement with Equinor, which will see the Norwegian National Oil Company purchase 1.75 million metric tons per year of LNG on a free-on-board basis for a price of purchase indexed to the Henry Hub price, for a period of 15 years.
Natural gas prices in Europe soared as traders panicked over the possibility of reduced LNG supplies from Australia, the world's main supplier of the raw material. Prices of TTF, the European benchmark, climbed nearly 10% to 41 euros per megawatt hour ($13 per million British thermal units) in Monday's session, before ending the day 6.5% higher at 40 euros MWh.
Commodity analysts said the sudden jump was also likely due to some traders rushing to close out their short positions on news of the supply squeeze. Europe has failed to secure enough long-term LNG contracts to offset the disruption of Russian gas imports, and Reuters warned that this could prove costly next winter, with a sharp tightening in the market.
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The article The German BASF and the American Cheniere reach a long-term agreement for the import of Liquefied Natural Gan comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-tedesca-basf-e-lamericana-cheniere-raggiungono-un-accordo-a-lungo-termine-per-limport-di-gan-naturale-liquefatto/ on Wed, 23 Aug 2023 08:00:18 +0000.