BASF signs 15-year natural gas contract

BASF signed a 15-year contract with China’s ENN Energy to purchase natural gas for its Zhanjiang Verbund site.

Following the contract, ENN Energy said it will invest in the construction of the needed supporting natural gas gate stations and pipelines to help ensure a stable natural gas supply to BASF’s Zhanjiang Verbund site.

The new smart Verbund site will include a steam cracker with a capacity of 1 million metric tons of ethylene per year and downstream plants for consumer-oriented products. (Image: BASF)

The Zhanjiang Verbund site will be BASF’s largest investment to date with around €10 billion upon completion. It will be operated under the sole responsibility of BASF and will be the company’s third-largest Verbund site worldwide, following Ludwigshafen, Germany, and Antwerp, Belgium.

“This is a crucial milestone for BASF to secure one of the essential energies required for our Zhanjiang Verbund site,” said Marko Murtonen, senior vice president, New Verbund Site China, BASF & General Manager, BASF Integrated Site (Guangdong) Co. Ltd. “As one of the important fuels and raw material sources, natural gas plays a significant role in the energy and raw material balance for BASF’s Zhanjiang Verbund site in both its construction phase and operation phase,”

He said BASF is dedicated to building the Zhanjiang Verbund site as a role model of sustainable production.

“We are convinced that this partnership will not only benefit both parties but also contribute to building the Donghai Island into a world-class industrial cluster for a joint sustainable future of Zhanjiang,” Murtonen said.

BASF Zhanjiang Verbund site will be built in phases. The first plant producing engineering plastics has been announced to be put into inauguration in September 2022. The second plant for the production of thermoplastic polyurethanes (TPU) announced its inauguration in January 2024, marking the successful completion of the initial construction phase. Both plants will serve the increasing needs of various growth industries in southern China and throughout Asia. The site is now focusing on building its core of the Verbund including a steam cracker and several downstream plants to produce petrochemicals and intermediates, among others.