Boosting LNG Arsenal: JERA Signs Offtake Agreement for NextDecade’s Train 5 at Rio Grande LNG Project

Japan’s energy major JERA has taken significant steps to enhance its liquefied natural gas (LNG) portfolio by securing a new offtake agreement with the Houston-based NextDecade Corporation. This agreement paves the way for NextDecade to move closer to a positive final investment decision (FID) on the fifth train at its LNG export project in Texas, United States.

Under the liquefied natural gas sale and purchase agreement (SPA) for offtake from Train 5 at the Rio Grande LNG (RGLNG) project, JERA will purchase 2 million tonnes per annum (mtpa) of LNG for a period of 20 years on a free on board basis at a price indexed to Henry Hub, contingent upon a positive FID on Train 5.

NextDecade has outlined that the FID is subject to various conditions, including entering into suitable commercial agreements, securing an engineering, procurement, and construction agreement, and obtaining sufficient financing for the construction of Train 5 and related infrastructure.

Matt Schatzman, Chairman and CEO of NextDecade, expressed his satisfaction with the agreement, stating: “We are delighted to announce JERA as a customer for Rio Grande LNG Train 5. We have witnessed robust commercial progress this year for Rio Grande LNG, which is driving us towards a positive FID for Train 5.”

The Rio Grande LNG natural gas liquefaction and export facility, located at the Port of Brownsville in Texas, is currently under construction or in development with approximately 48 mtpa of potential liquefaction capacity. The facility has the potential to expand to accommodate up to ten liquefaction trains.

This 20-year offtake agreement for Train 5 follows NextDecade’s recent agreements with Aramco and TotalEnergies for Train 4. The FID for Phase 1 of the Rio Grande LNG project, declared in July 2023, enabled Bechtel to proceed with full construction, which officially commenced in October 2023.

JERA’s latest LNG offtake deal with NextDecade comes after the firm secured a multi-year agreement with ADNOC Gas for the supply of LNG from the UAE firm’s Das Island liquefaction facility.