NextDecade, Engie in Rio Grande LNG deal
US LNG developer NextDecade said May 2 it had executed a long-term sale and purchase agreement (SPA) with French ENGIE for LNG from the planned Rio Grande LNG project in Brownsville, Texas.
The 15-year agreement, which covers 1.75mn mt/yr of offtake from the first two trains of Rio Grande on a free-on-board basis, comes in the wake of talks between the two parties which collapsed in 2020 over French government concerns about methane emissions associated with the 27mn mt/yr Rio Grande project.
NextDecade now intends to reduce CO2 emissions associated with Rio Grande LNG by more than 90% using carbon capture and storage (CCS) technology combined with responsibly-sourced, certified natural gas and the use of net-zero electricity to drive the facility’s compressors and other electrical equipment.
“We are pleased to announce this SPA with ENGIE, a significant European energy supplier and leader in the global transition toward lower carbon energy solutions,” NextDecade CEO Matt Schatzman said. “The signing of this SPA is an important step in showing our commitment in the areas of environmental stewardship, social responsibility, and governance best practices, while upholding the LNG industry’s highest standards. It also shows how we can help meet our buyers' climate change initiatives, while providing them access to secure energy supply.”
The SPA with ENGIE is the second in the past month for LNG from the first two of five trains at Rio Grande, which NextDecade hopes to sanction with a final investment decision in the second half this year, leading to commissioning in 2026.
In April, China’s ENN Natural Gas, through its subsidiary ENN LNG (Singapore), signed a 20-year SPA for 1.5mn mt/yr from the first two trains at the project. And in March, a heads of agreement was inked with China’s Guangdong Energy Group which is expected to lead to a SPA in Q2 2022 for 1.5mn mt/yr from the first train.