The blast, which occurred around 11:30 am (local time) and triggered a huge fire, happened during work on a pipeline, the global chemicals giant said in a statement.
"Several people were injured. Some people are missing," BASF said.
A large fire and a huge column of grey smoke could be seen rising from the site, a vast industrial complex with a harbour on the Rhine river.
Firefighters were still trying to extinguish the flames by 1900 IST while police had blocked off nearby roads, an AFP reporter at the scene said.
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The company said residents in Ludwigshafen and nearby Mannheim should remain inside and shut doors and windows.
Local authorities have also asked nurseries and schools to keep children indoors, but no evacuations have been ordered.
"We are still investigating the precise cause. The relevant authorities have been informed," BASF said.
The site's steam cracker units -- used in a chemical procedure to produce lighter hydrocarbons -- have been shut down for safety reasons, it added.
City authorities said fire engines as well as a fireboat had been deployed to the scene.
On its Twitter account, Ludwigshafen added that some residents had complained of respiratory irritations.
An emergency hotline has been set up as well as an information tent.
The Landeshafen Nord site where the explosion took place is a harbour used for the transportation of combustible fluids and liquefied gases.
On its website, the company describes the site as a "very important for BASF's supply of raw materials", where more than 2.6 million tonnes are handled each year.
The company employs 36,000 people in Ludwigshafen.
BASF was also grappling with a second, smaller incident at its nearby Lampertheim plant where four people were injured in a gas explosion and had to be taken to hospital, DPA news agency reported.
That incident is also still being investigated.
BASF employs over 110,000 employees worldwide and with sales of more than 70 billion euros (USD 77 billion) last year.
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