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    NextDecade clinches LNG SPA with ExxonMobil


Exxon's Asia Pacific unit will take LNG for 20 years from Rio Grande LNG when it launches in 2026.

by: Callum Cyrus

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Natural Gas & LNG News, Americas, Liquefied Natural Gas (LNG), News By Country, United States

NextDecade clinches LNG SPA with ExxonMobil

NextDecade said July 27 it had executed a 20-year sales and purchase agreement for its 27mn metric tons/year Rio Grande LNG export project in Texas with US major ExxonMobil's Asia Pacific LNG subsidiary.

NextDecade's Rio Grande LNG plant is currently expected online as early as 2026, with sanctioning due in the second half of this year on a single liquefaction train, which will comprise its initial phase. The FIDs on Rio Grande LNG's additional capacity will follow thereafter. Given the current LNG demand curve, NextDecade anticipates securing further LNG contracts and financing that will support a positive FID in coming months.

Company CEO Matt Schatzman hailed the Exxon deal as the "beginning of a mutually beneficial relationship". Rio Grande LNG is billed as the first US LNG project to reduce carbon emissions by more than 90%, thanks to its 5mn metric tons/yr carbon capture and storage facility, equivalent to removing more than 1mn cars from the road. Schatzman said: "This agreement highlights the success of NextDecade's strategy to provide customers with low carbon-intensive LNG to help them meet their carbon reduction goals, while providing them access to secure energy supply.” 

The agreement with Exxon's Singapore unit is another signal that Asian customers are sweeping up long-term LNG deals, amid uncertainty over whether European interest will materialise beyond the current crisis. That uncertainty appears to be hanging over supplier confidence in contract negotiation with European utilities. It comes after PTT clinched a 1mn mt/yr SPA with Cheniere Energy's Corpus Christi facility yesterday, but Europe remained the top destination for US spot cargoes in 1H 2022.

Bloomberg reported July 25 that Asian gas prices were rallying in response to Gazprom's curtailments and fears of an extended supply crunch. The North Asia LNG benchmark climbed 12% late last week, reaching its highest watershed since Moscow's invasion of Ukraine in February.