NextDecade Corp. the developer of the Rio Grande LNG export project on the Brownsville Ship Channel in Texas, has signed a 15-year sale and purchase agreement (SPA) with Japanese trading house Itochu Corp., its first deal with Japan and its seventh SPA overall.
Under the latest SPA, Itochu will purchase 1.0 million tonnes per annum of LNG indexed to Henry Hub on a free-on-board basis.
Itochu was also one of the three Japanese companies that recently signed deals with Oman LNG on the Arabian Peninsula for 800,000 tonnes per annum of deliveries each.
“We are honored to have Itochu as our first Japanese customer,” said Matt Schatzman, NextDecade's Chairman and Chief Executive.
“We look forward to providing Itochu and their customers with LNG, and we are actively working to reduce the carbon footprint of the Rio Grande LNG facility through our proposed carbon capture and storage project,” added the CEO of the Nasdaq-listed company.
NextDecade had previously signed an increase for the SPA with ENN LNG of Singapore, a trading unit of the Chinese ENN Natural Gas Group.
Under that 10-year SPA, ENN will now purchase 2.0 MTPA of LNG. Several other Chinese companies have signed agreements for volumes from the Rio Grande plant.
The company’s sales volumes will be supplied from the first three Trains at the Rio Grande facility.
Houston, Texas-based NextDecade has ultimate plans and permits to produce up to 27 MTPA of LNG from five liquefaction Trains at the Rio Grande facility.
The Rio Grande project has been delayed several times since 2020 and was originally expected to start producing LNG in 2023.
NextDecade said it was currently targeting a positive final investment decision on the first three Trains during the first quarter of 2023, with FIDs of its remaining Trains to follow thereafter.
NextDecade had other deals signed in December 2022 and in previous months, including one with Galp Trading S.A. of Portugal.
This was its fifth deal of last year and counting the increase of volumes for ENN Group and the latest Itochu agreement to supply Japan, NextDecade has signed a total of seven supply accords.
NextDecade's other SPAs during 2022 included one with ExxonMobil Corp.
The US major signed a 20-year supply deal with NextDecade at the end of July 2022 through its trading subsidiary in Asia.