ADNOC has acquired a 11.7% stake in Phase 1 of the Rio Grande LNG (RGLNG) project in Brownsville, Texas, from an investment vehicle of Global Infrastructure Partners (GIP).
This investment in NextDecade’s liquefied natural gas (LNG) facility aligns with ADNOC’s strategy to expand its lower-carbon LNG portfolio to meet growing global demand.
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Financial terms of the deal were undisclosed.
NextDecade will retain its expected economic interest in Phase 1 of the LNG project and its interests in the potential expansion of Trains 4 and 5.
NextDecade chairman and CEO Matt Schatzman said: “LNG from our facility will allow ADNOC to further increase its presence in the global LNG market, while also supplying global customers with more affordable and less carbon-intensive LNG.”
The investment also provides ADNOC with an option for future equity participation in Trains 4 and 5.
The Rio Grande LNG project is set to produce a less carbon-intensive form of LNG. The first phase of the project consists of three liquefaction trains with a combined annual capacity of 17.5 million tonnes and capital expenditures of $14.8bn (€13.2bn).
The Rio Grande project will have a full production capacity of approximately 27mtpa.
Furthermore, Adnoc and NextDecade have signed a 20-year offtake agreement for 1.9mtpa from Train 4 of the RGLNG project, subject to a final investment decision.
The agreement is based on a free-on-board pricing structure indexed to the Henry Hub.
Located near Brownsville, Texas, the Rio Grande LNG project aims to capture and permanently store more than 5mtpa of CO₂ through its proposed carbon capture and storage project.
ADNOC low-carbon solutions and international growth executive director Musabbeh Al Kaabi said: “We are delighted to partner with NextDecade on this world-class lower-carbon LNG project as it marks a significant milestone in ADNOC’s international growth strategy and provides us access to one of the world’s top LNG export markets.
“As global energy demand continues to increase, ADNOC is growing our diversified energy portfolio to ensure a secure, reliable and responsible supply of energy to our customers while driving innovation and greater value.”
NextDecade is planning to make a final investment decision on Train 4 in the second half of 2024. This is contingent on finalising contracts and securing adequate financing.
