NextDecade and Galp ink 20-year LNG sale and purchase deal
US energy company NextDecade has signed a long-term sale and purchase agreement with Portuguese counterpart Galp for the supply of liquefied natural gas (LNG) from its Rio Grande LNG export project in Brownsville, Texas.
Under the 20-year agreement, Galp will purchase 1.0 million tonnes per annum (mtpa) of LNG indexed to Henry Hub on a free-on-board basis.
According to Galp, commercial deliveries are expected to start in 2027, providing the company with access to volumes of LNG from the US, complementing Venture Global’s supplies, which are due to start during 2023.
“We are honoured to have Galp, one of Portugal’s largest energy companies and a key player in the Iberian Peninsula, as our customer”, said Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer. “We look forward to helping Galp, as well as other European companies and their customers, meet their energy needs by offering a lower-cost, reliable source of LNG with lower carbon intensity.”
NextDecade, through its subsidiaries Rio Grande LNG and NEXT Carbon Solutions, is developing an LNG export project in South Texas, the Rio Grande LNG, with a liquefaction capacity of 27 mtpa, associated with one of the largest capture and carbon storage (CCS) underway in North America.
The company is currently targeting a positive final investment decision (FID) on the first three trains of the project during the first quarter of 2023, with FIDs of its remaining trains to follow thereafter.
This year, NextDecade secured several LNG sale and purchase agreements for its Rio Grande LNG project, including those with ExxonMobil, Guangdong Energy, China Gas, and ENN.