TotalEnergies has exercised its option to purchase liquefied natural gas (LNG) from Train 4 of NextDecade’s Rio Grande LNG facility near Brownsville, Texas, US.
Subsidiaries of both companies have entered into a long-term sale and purchase agreement (SPA) in which TotalEnergies Gas & Power North America will acquire 1.5 million tonnes per annum (mtpa) of LNG over a 20-year period.
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The agreement is contingent upon a positive final investment decision (FID) for Train 4, which will be decided based on various factors including the arrangement of sufficient financing for the construction of Train 4 and its associated infrastructure.
The LNG will be provided on a free-on-board (FOB) basis, with pricing indexed to the Henry Hub benchmark.
NextDecade chairman and chief executive officer Matt Schatzman said: “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.
“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 FID.”
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By GlobalDataNextDecade has secured long-term commitments for a total of 4.6mtpa from Train 4 and anticipates that these agreements will be adequate to support a positive FID.
The Rio Grande LNG facility, situated on a 984-acre site in Brownsville, is designed to produce LNG with a lower carbon intensity, aligning with the industry’s shift towards more sustainable energy practices.
NextDecade is developing and constructing the facility through its subsidiaries.
Last month, NextDecade signed a framework agreement with Baker Hughes to supply gas turbine and refrigerant compressor technology for Trains 4 through 8 at the Rio Grande LNG facility.
This agreement also includes the provision of maintenance services for the equipment supplied.
