NextDecade, TotalEnergies Execute LNG Offtake Agreement from Rio Grande Facility

TotalEnergies Gas & Power North America applied its LNG purchase option to Train 4 at NextDecade’s Rio Grande LNG Facility in Brownsville, TX. The companies signed a 20-year LNG sale and purchase agreement (SPA) in which TotalEnergies receives 1.5 MTPA of LNG at a price indexed to Henry Hub and on a free-on-board basis.

“TotalEnergies has been a key contributor to the success of Rio Grande LNG Phase 1, and we are pleased to be expanding our strategic partnership with TotalEnergies with the execution of this Train 4 SPA,” said Matt Schatzman, NextDecade’s Chairman and CEO. “This SPA completes the commercial support we need for Rio Grande LNG Train 4, and we are now focused on progressing Train 4 toward a positive final investment decision.”

Currently, NextDecade has sold 4.6 MTPA of LNG from Train 4, all of which are pending its positive final investment decision (FID). The positive FID, with this contract to TotalEnergies, is now possible due to adequate financing to build Train 4 and its connected infrastructure.

Baker Hughes + NextDecade

Last month, Baker Hughes, under a framework agreement with NextDecade, agreed to deliver its gas turbine and refrigerant compressor equipment packages for Trains 4 – 8 at the Rio Grande LNG facility. The company will also perform maintenance on these equipment packages. Baker Hughes anticipates orders as NextDecade’s project continues.

Once NextDecade permits, constructs, and operates Trains 6 through 8, the company’s total liquefaction capacity will increase by approximately 18 MTPA. The permitting processes for Train 6, 7, and 8 are currently under development and scheduled to begin soon.

LNG SPA’s

In May 2024, the Abu Dhabi National Oil Co. (ADNOC) acquired an 11.7% stake in Phase 1—Trains 1, 2, and 3—of NextDecade’s Rio Grande LNG (RGLNG) export project in Texas. In addition, the partners established a 20-year LNG offtake agreement from RGLNG Train 4. According to the agreement, ADNOC will receive 1.9 MTPA of LNG from the project on a free-on-board basis at a price indexed to Henry Hub.

The acquisition of Phase 1 RGLNG equity was achieved through an investment vehicle of Global Infrastructure Partners (GIP). ADNOC received a segment of GIP’s equity interest in Phase 1 and NextDecade will maintain its expected economic interest in this phase—it also retains interests in the Train 4 and Train 5 expansion capacity. ADNOC’s purchase also guarantees the option, granted by GIP, for potential equity participation in the planned Trains 4 and 5.

In June, subsidiaries of Aramco and NextDecade completed a non-binding heads of agreement (HoA) for a 20-year LNG purchase and sale agreement for offtake from Train 4 at RGLNG. According to the HoA, Aramco plans to purchase 1.2 MTPA of LNG for 20 years.