LNG

US federal regulators have granted NextDecade another three years to complete the first five trains at its Rio Grande LNG export project, extending the in-service-deadline to November 2031. NextDecade subsequently filed an application for train 6.

NextDecade is preparing for a 2027 final investment decision (FID) for Train 6 at its Rio Grande LNG project, as offtake interest already exceeds the facility’s planned capacity.

Enbridge Inc, the North American pipelines company, has signed an accord with two equity fund-linked firms and MPLX LP, a unit of Marathon Petroleum, to form a venture to develop, construct and operate natural gas pipeline and storage assets connecting Permian Basin supply to growing LNG and US Gulf Coast demand.

The joint venture will be owned by the WhiteWater and I Squared firms with a 50.6 percent stake, MPLX with 30.4 percent and Enbridge with 19.0 percent.

There assets base is widespread and strategic across the Texas gas hubs.

The assets include 100 percent interest in Whistler pipeline, a 450-mile, 42-inch intrastate pipeline transporting natural gas from an interconnect with the Waha Header in the Permian Basin to Agua Dulce in Texas, near to the starting point of the proposed Rio Bravo pipeline and LNG plant.

NextDecade project

They will also own a 100 percent interest in the Rio Bravo pipeline project comprising 137 miles of new 42-inch and 48-inch pipelines transporting natural gas from the Agua Dulce supply area to NextDecade's Rio Grande LNG export project in Brownsville, Texas.

The joint venture will additionally own a 70 percent interest in the in Agua Dulce-to-Corpus Christi (ADCC) pipeline, a 40-mile, 42-inch proposed intrastate pipeline designed to transport 1.7 billion cubic feet per day of natural gas from the terminus of the Whistler pipeline in Agua Dulce to Cheniere Energy’s Corpus Christi LNG export facility.

The ADCC pipeline is expected to be in-service in the third quarter of 2024 and is expandable up to 2.5 Bcf per day.

Enbridge, based in Calgary, Alberta, noted that around 98 percent of capacity in the venture is contracted under long-term, take-or-pay contracts with an average contract length greater than 10 years.

The final part of the venture is a 50 percent interest in Waha Gas Storage, a 2.0 Bcf gas storage cavern facility, with additional topside infrastructure capable of making injections and withdrawals.

“Upon closing of the transaction, Enbridge will contribute its wholly-owned Rio Bravo pipeline project and US$350 million in cash to the joint venture, and will fund the first US$150M of the post-closing capex to complete the Rio Bravo pipeline project,” said a statement.

Investment grade

“Enbridge will receive a 19 percent equity interest in the joint venture and retain a 25 percent economic interest in the Rio Bravo pipeline project, subject to certain redemption rights of the joint venture partners.” it added.

The counterparties in the venture are mostly investment grade and include leading operators in the Permian Basin.

“This is a great way to enhance our super-system approach, bringing energy supply to places where it is needed most and providing last mile connectivity to domestic and export customers,” said Cynthia Hansen, President of Gas Transmission and Midstream at Enbridge.

Enbridge will be contributing its Rio Bravo pipeline project, which will extend the joint venture's current infrastructure to serve LNG and other customers on the US Gulf Coast.

Enbridge's share of the post-closing capex to complete the Rio Bravo pipeline project will be 100 percent of the first US$150M and thereafter proportionate to its aggregate economic interest in that project.

“The transaction optimizes our investment capacity by increasing the efficiency of our capital,” said Pat Murray, Chief Financial Officer of Enbridge.

“We will begin receiving immediate cash flow and will share in future growth opportunities,” Murray stated.

“Having access to new Permian natural gas infrastructure enhances and increases the visibility of our medium-term growth outlook, while being accretive to our balance sheet,” he concluded.

The joint venture agreement is expected to close in the second quarter of 2024, subject to receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

NextDecade Corp., the developer of the Rio Grande LNG export project in Texas, has formally taken a final investment decision to build the first three liquefaction Trains and export facilities with anticipated full capacity of around 27 million tonnes per annum with funding from the US, the Middle East and Asia.

Baker Hughes, the US energy technology company and compressor provide for liquefaction plants, was awarded an order by Bechtel Energy to supply equipment for the Rio Grande export project in Texas being developed by NextDecade Corp. and partners.

NextDecade Corp., the developer of the Rio Grande LNG export project in Texas, has teamed up with a New York investment fund and TotalEnergies to enable a final investment decision for the first three liquefaction Trains and with the French major buying 5.4 million tonnes per annum of cargoes and taking a large stake in NextDecade.

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.

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.

Supplying China

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.

NextDecade, the developer of the currently dormant Rio Grande LNG export project along the Brownsville Ship Channel, has posted third-quarter earnings after a year of little activity prior to the global increase in prices and demand.

Annova LNG, the medium-scale US project planned for the south bank of the Brownsville Ship Channel in Texas, will not now be proceeding following a decision by investors to cancel the venture, while the Chief Executive has already left the project to join Canadian pipeline company TC Energy.