NextDecade, the developer of the Rio Grande LNG export plant in Texas, has signed a long-term deal to supply liquefied natural gas to Portuguese energy firm and LNG player Galp.
Under the 20-year sales and purchase deal, Galp would buy from Rio Grande LNG one million tons per annum of LNG, according to a statement by Galp released on Tuesday.
Commercial deliveries of Next Decade’s Rio Grande LNG project in Texas are expected to start in 2027.
Galp’s volumes are indexed to Henry Hub on a FOB basis plus a fixed liquefaction fee, it said.
“This agreement enhances Galp’s access to competitive US LNG volumes, supplementing supplies from Venture Global, which are due to start during 2023,” Galp said.
It also adds more flexibility and geographic diversity to its sourcing portfolio, the firm said.
Rio Grande LNG site works
NextDecade and compatriot engineering and construction giant Bechtel are moving forward with early construction works to prepare the Rio Grande site located in the Port of Brownsville, Texas.
NextDecade said in a separate statement it is currently targeting a positive final investment decision (FID) on the first three trains of the LNG export project during the first quarter of 2023, with FIDs of its remaining trains to follow thereafter.
It previously planned to take the decision by the end of this year.
The full Rio Grande project would include five trains with a capacity of 27 mtpa.
Last month, NextDecade also won a two year-extension from FERC to complete construction of and make available for service the Rio Grande LNG terminal until November 22, 2028.
(Article updated to include a statement by NextDecade.)