Saudi Arabia’s energy heavyweight Aramco has signed a multi-year liquefied natural gas (LNG) sale and purchase agreement (SPA) with the Houston-headquartered NextDecade Corporation, ensuring offtake from an LNG export project in Texas, United States (U.S.).
Following a final investment decision, reached in July 2023 when Bechtel got its second green light in three months to proceed with full construction of the giant Rio Grande LNG (RGLNG) project at the Port of Brownsville in Texas, the construction of Phase 1 officially started in October 2023.
Before NextDecade confirmed a multibillion-dollar deal with Bechtel for Train 4 and related infrastructure, a non-binding heads of agreement (HoA) was secured with Aramco for 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 from the fourth train. This came after a similar deal was secured with ADNOC .
According to the U.S. player, the 20-year LNG SPA has been executed with a subsidiary of Aramco for offtake from Train 4 at the Rio Grande LNG facility, enabling the purchase of 1.2 mtpa of LNG, subject to a positive FID on Train 4.
Matt Schatzman , NextDecade’s Chairman and Chief Executive Officer, commented: “We are extremely pleased to have Aramco as a customer in Rio Grande LNG Train 4. The Rio Grande LNG Facility continues to attract outstanding LNG customers, which we believe is a testament to the quality of our project.”
The positive FID on Train 4 is expected to be subject to, among other things, entering into appropriate commercial arrangements and obtaining adequate financing to construct this train and related infrastructure.
The Rio Grande LNG project in Texas is among the energy developments poised to reap the benefits of the Trump administration’s zest to unlock America’s so-called energy dominance , primarily with LNG as the crown jewel of the fossil fuel trinity encompassing coal, oil, and gas.
After vacating the reauthorization of the Rio Grande LNG facility in August 2024, the U.S. Court of Appeals for the D.C. Circuit issued a revision on March 18 to the judgment, remanding without vacatur the FERC’s order for the first five liquefaction trains at the Rio Grande LNG facility.
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NextDecade recently disclosed its extension plans for the project, underlining that it has the potential to be one of the world’s largest LNG production and export facilities. While work is underway to start the development and permitting process for trains 6-8, the U.S. firm sees sufficient space for the development of up to ten total liquefaction trains.
Located on a 984-acre site near Brownsville, Rio Grande LNG is seen as the first U.S. LNG project offering an expected emissions reduction of over 90%, thanks to the firm’s proposed carbon capture and storage (CCS) undertaking to capture and permanently store more than 5 million metric tons of CO2 per annum.