LNG

NextDecade Corp., the developer of the Rio Grande LNG export project on the Brownsville Ship Channel in Texas, has amended its engineering contract agreement with US company Bechtel Energy to extend the price validity.

The engineering, procurement and construction contract with Bechtel for the building of the first three liquefaction Trains has been extended to June 15, 2023.

“NextDecade currently estimates the aggregate lump-sum EPC cost to construct Trains 1-3 of the Rio Grande Facility at approximately $11.5 billion,” said NextDecade in a statement to the Nasdaq global exchange.

“The final EPC lump-sum contract pricing for Trains 1-3 of the Rio Grande facility will be determined prior to a final investment decision and is subject to change, including if RGLNG does not issue a full notice to proceed to Bechtel on or before June 15, unless extended by mutual agreement of the parties thereto,” the company explained.

NextDecade said that it was currently targeting a positive FID on Trains 1-3 of the Rio Grande project before the end of the second quarter of 2023, with FIDs on the remaining Trains to follow later.

Houston, Texas-based Next Decade has ultimate plans and permits to produce up to 27 MTPA of LNG from five liquefaction Trains at the Rio Grande facility.

Numerous delays

The Rio Grande project has been delayed on numerous occasions over the years and was originally expected to start producing LNG in 2023.

NextDecade signed about half a dozen sales and purchase agreements (SPAs) in 2022, the most recent being a volume increase in December with ENN LNG of Singapore, a trading unit of the Chinese ENN Natural Gas Group.

Under the 20-year SPA, ENN will now purchase 2.0 MTPA of LNG. NextDecade said this was a 500,000 tonnes per annum increase from the original 1.5 MTPA SPA announced earlier in 2022.

All volumes of LNG are indexed to the US benchmark Henry Hub natural gas price and will be supplied from the first three Trains at the Rio Grande facility.

Portugal deal

NextDecade earlier in December 2022 signed an SPA with Galp Trading S.A. of Portugal.

This was its fifth deal of the year and the increase of volumes for ENN Group was its sixth volume sign-up.

NextDecade has made progress with other SPAs during 2022, including 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.

NextDecade has also signed three supply agreement with Chinese companies, including a 20-year deal with China Gas Hongda Energy Trading Co., a wholly-owned subsidiary of China Gas Holdings, the ENN Group and with Guangdong Energy Group Natural Gas.

The Sultanate of Oman on the Arabian Peninsula said it signed up a Chinese liquefied natural gas buyer as its eighth new customer from the renewed production concession at Oman LNG.

Oman LNG has signed a binding term-sheet agreement with the China International and Chemical Company (Unipec) to supply 1 million tonnes per annum of LNG starting in 2025.

Unipec is the trading arm of major Chinese energy company China Petrochemical Corp., also known as Sinopec.

The Unipec agreement is similar to seven others it has signed since the turn of the year with customers in Europe and Asia, though the Chinese deal is just for four years while the others are for up to 10 years.

“Unipec has become the latest beneficiary of Omani LNG and marks the first LNG term deal with a Chinese firm and opens the doors for new opportunities in the Chinese market,” said a statement.

The agreement was signed in the capital Muscat between Hamed Al-Naamany, Chief Executive of Oman LNG, and Wang Yahang, General Manager of Unipec, in the presence of Salim Al-Aufi, Oman’s Minister of Energy and Minerals.

“The term-sheet signing with Unipec marks another milestone, where the Omani LNG will be creating new opportunities in China. Such an agreement will further enhance our position in the global energy industry and ensure we maintain our reputation as a reliable energy supplier worldwide,” said Al-Naamany.

Previous deals

The previous Omani LNG deal was signed at the end of January 2023 with Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) .

Oman will supply BOTAS with 1 MTPA of LNG for a 10-year period starting in 2025.

Similar deals to the BOTAS agreement have been signed with France’s TotalEnergies, Thailand’s oil and gas firm PTT, three Japanese buyers, JERA Co. Inc., Mitsui & Co. and Itochu Corp., and UK major Shell.

The new Oman LNG contracts are being lined up as the company plans to extend the lifespan of the liquefaction complex at Qalhat for another 10 years beyond its current concession to 2024.

The Omani LNG export facilities comprise the amalgamated three liquefaction Trains of Oman LNG and Qalhat LNG, which were merged in 2013 under the banner of Oman LNG.

The company has three liquefaction Trains at its site near Sur in the South Sharqiyah Governorate with a combined nameplate capacity of almost 11 MTPA.

The two-Train original Oman LNG plant has 7.1MT of capacity and the one-Train Qalhat plant has 3.6MT of capacity, though actual capacity is more after de-bottlenecking upgrades.

Oman had previous cut LNG output but the Ghazeer and Khazzan natural gas discoveries have in the last few years underpinned LNG production.

The gas has also opened the way for a proposed small-scale LNG plant to service the LNG bunkering market at the Port of Sohar.

That project envisages annual production capacity of 1 MTPA in Sohar, one of the largest industrial zones in the Middle East and well located for ships passing through the Gulf of Oman.

The South Koreans have swooped to become the fourth customer signed up in foru weeks for Energy Transfer LP’s liquefied natural gas volumes from the Lake Charles LNG terminal on the US Gulf Coast being transformed into a liquefaction and export plant.