Aramco and NextDecade enter a 20-year LNG supply agreement

Aramco, one of the world’s leading integrated energy and chemicals companies, and NextDecade Corporation announced today that their respective subsidiaries have signed a 20-year liquefied natural gas sale and purchase agreement (LNG SPA) for offtake from Train 4 at the Rio Grande LNG Facility at the Port of Brownsville, Texas, USA.

Under the terms of the HoA, Aramco expects to purchase 1.2 million tonnes per annum (MTPA) of LNG for 20 years on a free on-board basis, at a price indexed to Henry Hub. Aramco and NextDecade are currently in the process of negotiating a binding agreement, and once executed, the effectiveness of which will be subject to a positive Final Investment Decision on Train 4.

When commenting on the agreement, Nasir K. Al-Naimi, Upstream President of Aramco, said: "We look forward to finalising the terms of a long-term LNG offtake agreement with NextDecade, as we explore opportunities to expand our presence in international energy markets. We expect LNG to play an important role in meeting the rising demand for secure and efficient energy.”

Matt Schatzman, Chairman and Chief Executive Officer of NextDecade, said in a press statement, “We are pleased to have reached a Heads of Agreement with Aramco for LNG from Train 4, as Aramco seeks to expand its LNG portfolio. We look forward to finalising the LNG SPA with Aramco and to pursuing other opportunities together.”

Last month, ADNOC acquired 11.7% stake in Phase 1 (Trains 1-3) of NextDecade Corporation’s Rio Grande LNG, marking the company’s first strategic investment in the US and complementing its efforts to expand its lower-carbon LNG portfolio to meet growing gas demand.

Additionally,  the two companies entered a 20-year LNG offtake agreement for 1.9 mtpa from Rio Grande LNG Train 4.