NextDecade aims to supply US LNG to China’s Guangdong Energy

NextDecade, the developer of the Rio Grande LNG export plant in Texas, said it has signed a binding heads of agreement to supply liquefied natural gas to Chinese state-owned utility Guangdong Energy.

Under the 20-year deal, NextDecade would supply up to 1.5 million tonnes per annum of LNG indexed to Henry Hub to Guangdong Energy Group Natural Gas, it said in a statement on Thursday.

The LNG supply would initially come from the first train of the planned Rio Grande LNG terminal in Brownsville, Texas. NextDecade expects to start commercial operations at this unit in 2026.

Also, the agreement provides that Guangdong Energy and NextDecade would complete the sale and purchase agreement (SPA) in the second quarter of 2022, the statement said.

FID in second half of 2022?

Earlier this year, NextDecade postponed the final investment decision to build its proposed Rio Grande LNG export plant to the second half of 2022.

The firm first plans to build two liquefaction trains with a capacity of 11 million tonnes per year while the full project would include five trains with a capacity of 27 mtpa.

“Assuming the achievement of further LNG contracting and financing, NextDecade anticipates making a positive final investment decision on a minimum of two trains of the Rio Grande LNG project in the second half of 2022,” the firm confirmed on Thursday.

This marks the second deal and the first Chinese customer for the Rio Grande project as NextDecade has a 20-year deal with Shell for 2 mtpa of LNG supplies.

“Guangdong Energy is one of the largest power generation enterprises in Guangdong and we are pleased they have entrusted us to supply their rapidly growing business,” Matt Schatzman, NextDecade’s CEO, said.

“Henry Hub-linked LNG will be an important part of our LNG portfolio as we transit to a greener future and optimize our resource procurement,” Zhu Zhanfang, chairman of Guangdong Energy Natural Gas, said.

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