NextDecade and China Gas sign LNG sale and purchase deal
U.S. LNG project developer NextDecade has signed a 20-year deal to supply LNG to a subsidiary of Chinese piped-gas operator China Gas.
On 5 July, NextDecade announced the execution of a sale and purchase agreement (SPA) with China Gas Hongda Energy Trading. The SPA is for the supply of LNG from NextDecade’s Rio Grande LNG export project in Brownsville, Texas.
Under the SPA, China Gas will purchase 1.0 million tonnes per annum (mtpa) of LNG indexed to Henry Hub and delivered on a free-on-board (FOB) basis. The LNG will come from the second train at Rio Grande LNG, which is expected to start commercial operations as early as 2027.
NextDecade anticipates making a positive final investment decision (FID) on up to three trains of the Rio Grande LNG export project in the second half of 2022, with FIDs of its remaining trains to follow thereafter. This estimation is based on the current expected demand for LNG and assuming the achievement of further LNG contracting and financing.
“We are pleased to announce the signing of this long-term SPA with China Gas, one of China’s largest natural gas distribution companies supplying approximately 43 million households across China,” said Matt Schatzman, NextDecade’s CEO. “This SPA demonstrates the continued acceleration of RGLNG’s commercial momentum…”
“The signing of this long-term SPA with NextDecade will further optimise China Gas’s portfolio, expand resource supply channels, and ensure that we can meet our customers’ growing demand for quality, reliable and low carbon content energy. This SPA demonstrates China Gas’s determination to unswervingly implement China’s national low-carbon energy development strategy,” said Yalong Qi, general manager of China Gas Hongda Energy Trading.