US LNG export project developer NextDecade Corporation signed a 20-year sale and purchase agreement with Shell for the supply of volumes from its Rio Grande LNG export project in Brownsville, Texas.
Under the agreement, NextDecade will deliver 2 million tonnes of LNG per annum to Shell.
Pursuant to the SPA, Shell will purchase LNG on a free-on-board basis starting from the commercial operation date of Rio Grande LNG, currently expected in 2023, with approximately three-quarters of the purchased LNG volumes indexed to Brent and the remaining volumes indexed to domestic United States gas indices, including Henry Hub.
The SPA is the first-ever long-term contract with LNG produced out of the United States to be indexed to Brent and comes with full destination flexibility.
Speaking of the deal with its foundation buyer Shell, Matt Schatzman , NextDecade’s president and CEO said, “Shell was the first to sign a long-term SPA from the United States indexed to Henry Hub in 2011, and so it is fitting they are the first to sign a long-term SPA from a U.S. LNG project indexed to Brent. We look forward to finalizing additional commercial agreements and to proceeding with the development of our Rio Grande LNG project.”
Slavko Preocanin , vice president, Shell LNG Marketing & Trading, said, “This agreement secures more volume for our portfolio in the 2020s and ensures we can meet the growing demand for secure, flexible and cleaner energy from our global customers.”
NextDecade anticipates making a positive final investment decision on up to three trains (Phase I) of the Rio Grande LNG project by the end of the third quarter of 2019.