NextDecade's Rio Grande Train 5 Export Facility will supply EQT with LNG
The companies announced on Wednesday that U.S. energy company EQT would purchase 1.5 million tons of liquefied gas per year from NextDecade’s Rio Grande Export Facility in Texas, for a period of 20 years.
NextDecade, also known by the name of a train or its fifth liquefaction plant, will provide superchilled fuel at Rio Grande from their fifth liquefaction unit.
The agreement is on a free on-board basis, at a price indexes to Henry Hub. This will only be possible if NextDecade makes a positive Final Investment Decision (FID) for Train 5.
The companies didn't disclose the financial costs of the deal.
The commercial activity in the U.S. Liquefied Natural Gas sector has increased rapidly since President Donald Trump lifted his moratorium on new permits for exports shortly after taking office.
According to the U.S. Energy Information Administration, the U.S. will be the largest LNG exporter in the world this year. Its total capacity should reach 115 millions metric tons.
NextDecade has begun construction of its Rio Grande LNG plant, which will have a capacity to produce 17.6 million tonnes per year. The company is developing its fourth- and fifth-liquefaction plant with an additional combined capacity of 10,8 mtpa.
The company anticipates completing commercialization of Train 5 by the end of the third quarter, and is expecting to achieve a positive final investment decision (FID) in the fourth. It expects a positive FID for Rio Grande LNG Train 4 before September 15.
Once they have enough contracts to finance the project, LNG developers usually reach a FID for their projects.
NextDecade signed a deal in late May to supply Japan's largest power generator JERA, with 2 million tonnes of LNG per year from the fifth liquefaction plant at its Rio Grande Project.
The LNG producer signed agreements with the top oil producer Saudi Aramco, and TotalEnergies for the supply of super-cooled gas from the fourth facility in the project.
NextDecade also extended the validity of its contract for engineering, procurement and construction with Bechtel Energy until November 15, from September 15. (Reporting and editing by Shilpa Majumdar in Bengaluru, with Pooja Menon reporting from Bengaluru)
(source: Reuters)
