NextDecade to Sell Texan Gas Pipe to Enbridge
Houston-based LNG developer NextDecade announced on February 13 it had signed a definitive agreement to sell 100% of the planned Rio Bravo gas pipeline in southern Texas to Canadian energy infrastructure operator Enbridge, for $25mn.
Rio Bravo is due to supply up to 4.5bn ft3/day of gas to NextDecade's Rio Grande LNG terminal from the Agua Dulce area. Under the deal, Enbridge will assume responsibility for developing, financing, constructing and operating the pipeline. The partners earlier negotiated an agreement giving NextDecade's rights to Rio Bravo's transport capacity for at least 20 years.
Enbridge will pay $15mn for the pipeline when the deal is closed, expected in the current quarter, and a further $10mn once NextDecade takes a final investment decision on Rio Grande. It said its commitment to the development of the pipeline "further strengthens our ability to serve the expanding LNG export market and fits squarely within our low-risk business model.”
Rio Grande is due to host six trains capable of exporting 27mn mt/yr of LNG, with first production likely in 2023-2024. Earlier this week the US Department of Energy granted the project authorisation to export LNG to non-free trade agreement countries. The gas comes from the Permian basin, which is so short of export capacity that the associated gas is often flared.