NextDecade, China’s Guangdong Ink Deal for Rio Grande LNG
HOUSTON — NextDecade Corp. has executed a binding Heads of Agreement (HOA) with Guangdong Energy Group Natural Gas Co. Ltd. for the long-term supply of LNG for 20 years from NextDecade’s Rio Grande LNG export project in Brownsville, Texas.
The HOA provides that Guangdong Energy will purchase up to 1.5 million tonnes per annum of LNG indexed to Henry Hub. The LNG supply will initially be from train one of Rio Grande LNG, which is expected to start commercial operations in 2026. The HOA also provides that Guangdong Energy and NextDecade will complete the sale and purchase agreement (SPA) in the second quarter of 2022.
“We are honored to have Guangdong Energy as the second foundation customer of our Rio Grande LNG project and our first Chinese customer,” Matt Schatzman, NextDecade’s chairman and CEO, said. “Guangdong Energy is one of the largest power generation enterprises in Guangdong and we are pleased they have entrusted us to supply their rapidly growing business.”
“We are pleased to be entering into a long-term SPA with NextDecade,” Zhu Zhanfang, chairman of Guangdong Energy Natural Gas Co., said. “Henry Hub-linked LNG will be an important part of our LNG portfolio as we transit to a greener future and optimize our resource procurement. We look forward to a long lasting and fruitful cooperation with NextDecade, not necessarily just in LNG supply, but potentially in carbon capture and storage as well.”
Assuming the achievement of further LNG contracting and financing, NextDecade anticipates making a positive final investment decision on a minimum of two trains of the Rio Grande LNG project in the second half of 2022.
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