TotalEnergies Signs Multi-Year LNG Agreement with NextDecade for Rio Grande LNG Project
TotalEnergies Gas & Power North America, a subsidiary of France’s energy giant TotalEnergies, has recently exercised its purchase option and finalized a multi-year liquefied natural gas (LNG) sale and purchase agreement (SPA) with NextDecade Corporation, a Houston-based energy company. This agreement paves the way for NextDecade to proceed with the construction of the fourth train at its Rio Grande LNG export project in Texas, United States.
Following Saudi Aramco’s signing of a 20-year SPA for 1.2 million tons per annum (mtpa) of LNG from Train 4 of the Rio Grande LNG project, TotalEnergies has secured a similar deal to purchase 1.5 mtpa of LNG for 20 years. The agreement is based on a free-on-board basis at a price indexed to Henry Hub, contingent upon a positive final investment decision on Train 4.
The recent SPA with TotalEnergies marks a significant milestone in the commercial agreements needed to support the FID for Train 4 of the Rio Grande LNG project. The FID for Phase 1 of the project was announced in July 2023, with construction officially commencing in October of the same year.
NextDecade’s Chairman and CEO, Matt Schatzman, expressed his satisfaction with the partnership with TotalEnergies, stating that the completion of the Train 4 SPA is crucial for advancing the project towards a positive FID. The company has already secured contracts for a total of 4.6 mtpa of LNG from Train 4 on a long-term basis.
NextDecade is actively developing and constructing the Rio Grande LNG facility near Brownsville, with plans for up to ten liquefaction trains on the 984-acre site. The project is expected to have a significant impact on emissions reduction, with proposed carbon capture and storage (CCS) initiatives aiming to capture and store over 5 million metric tons of CO2 per annum.
Overall, the partnership between TotalEnergies and NextDecade signifies a major step forward in the development of the Rio Grande LNG project, contributing to the growth of the LNG industry in the United States and supporting efforts towards sustainable energy production.