China Gas inks 20-year LNG deal with NextDecade

China Gas Holdings on July 5 announced that its wholly-owned subsidiary China Gas Hongda Energy Trading Co. and Rio Grande LNG, a subsidiary of NextDecade Corp, have signed a 20-year LNG sale and purchase agreement.

According to the agreement, NextDecade will supply 1mn metric tons/year of LNG to China Gas on a free-on-board basis. The purchase price is indexed to the benchmark price of Henry Hub. The first batch of LNG is expected to be delivered in 2027, China Gas said.

The LNG will come from the first two trains at the Rio Grande project, expected to start operations as early as 2026. NextDecade expects to take a final investment decision on at least two trains of the five-train, 27mn mt/yr project in the second half of this year.

This is NextDecade’s third LNG supply deal with a Chinese buyer. It signed an agreement with ENN in April and with state-owned utility Guangdong Energy in March.