NextDecade Signs LNG Offtake Agreement with TotalEnergies for Rio Grande LNG Train 4

NextDecade secures 20-year LNG deal with TotalEnergies for Rio Grande Train 4, marking key step toward final investment decision. (Image Credits: X | @NextDecadeLNG)

NextDecade Corporation announced that TotalEnergies has officially exercised its liquefied natural gas (LNG) purchase option for Train 4 at the Rio Grande LNG Facility. As part of this move, the subsidiaries of the two companies entered into a 20-year LNG Sale and Purchase Agreement (SPA), reaffirming their long-term partnership.

Key Terms of the Deal

According to the terms of the deal, TotalEnergies Gas & Power North America, Inc. will buy 1.5 million tonnes per year (MTPA) of LNG for 20 years. The deal is in a free-on-board (FOB) delivery structure with prices pegged to the Henry Hub natural gas benchmark. The SPA is subject to a positive Final Investment Decision (FID) for Train 4.

Commercial Milestone for Train 4

Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, said, “TotalEnergies has been a key contributor to the success of Rio Grande LNG Phase 1, and we are pleased to be expanding our strategic partnership with TotalEnergies with the execution of this Train 4 SPA”

He added, “This SPA completes the commercial support we need for Rio Grande LNG Train 4, and we are now focused on progressing Train 4 toward a positive FID”

With this new agreement, NextDecade has secured a total of 4.6 MTPA of long-term LNG commitments for Train 4. The company believes these commercial arrangements provide a strong foundation for moving forward with a positive FID.

Also read: NextDecade Signs 20-Year LNG Agreement with Aramco Subsidiary for Rio Grande Plant

While the commercial groundwork for Train 4 is now in place, the final investment decision will depend on several factors, including the arrangement of adequate financing to build the train and its associated infrastructure.