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Under the sales and purchase agreement, ConocoPhillips will purchase 1 million tonnes per annum (mtpa) of LNG for 20 years on a free on board basis at a price indexed to Henry Hub, according to statements by NextDecade and ConocoPhillips.
The deal remains subject to NextDecade making a positive final investment decision (FID) on Train 5.
This deal adds to ConocoPhillips’s Gulf Coast LNG supply.
Most recently, the company announced a long-term offtake agreement for 4 mtpa of LNG from Sempra Infrastucture’s Port Arthur LNG Phase 2, which is in addition to a prior agreement for 5 mtpa of LNG from Phase 1.
In addition to the SPA, ConocoPhillips’ expertise and experience in heavy hydrocarbon removal from feed gas is utilized at the Rio Grande LNG facility through its OCP CryoSep technology.
OCP CryoSep provides targeted recovery and/or removal of heavy hydrocarbons that would otherwise freeze or lead to high BTU content in LNG.
“We’re excited to help move this project closer to FID while advancing our global LNG portfolio strategy and 10 to 15 mtpa offtake ambition. We continue to build scale and diversification, adding supply and sales points offering further optionality for optimization,” Khoa Dao, chief commercial officer for ConocoPhillips, said.
FID in Q4
Matt Schatzman, NextDecade chairman and CEO, said that the company hass now completed commercialization of Train 5, and “we are focused on finishing the financing and achieving a positive FID.”
NextDecade has now announced a total of 4.5 mtpa of LNG from Train 5 sold under 20-year LNG SPAs, which it believes is sufficient to support a positive FID on Train 5.
Subject to obtaining adequate financing, NextDecade expects to achieve a positive FID on Train 5 in the fourth quarter of 2025, within the current price validity period for the company’s Train 5 EPC contract with Bechtel Energy.
Subject to obtaining adequate financing, NextDecade also continues to expect to achieve a positive FID on Rio Grande LNG Train 4 by September 15, 2025.
Rio Grande LNG
NextDecade is currently building three trains at the site located on the north shore of the Brownsville Ship Channel in south Texas.
In July 2023, NextDecade took the final investment decision on the first three Rio Grande LNG trains and completed a $18.4 billion project financing.
Additionally, the firm closed a joint venture agreement for the first phase, which included approximately $5.9 billion in financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala, and TotalEnergies.
The deal also included options for the fourth and fifth trains.
Phase 1, with a nameplate liquefaction capacity of 17.6 mtpa, has 16.2 mtpa of long-term binding LNG sale and purchase agreements.
In addition to these five trains, NextDecade announced plans in March to build up to five more trains at the Rio Grande LNG facility.
NextDecade said it is developing and beginning the permitting process for Trains 6 through 8.
The LNG terminal operator expects these trains to increase its total liquefaction capacity by approximately 18 mtpa once constructed and placed into operation.