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Under the sales and purchase agreement, EQT will purchase 1.5 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 EQT.
The deal remains subject to NextDecade making a positive final investment decision (FID) on Train 5.
This new SPA comes just a week after EQT signed a long-term deal with compatriot LNG exporter Sempra Infrastructure, a unit of Sempra, to buy LNG from the proposed second phase of the Port Arthur LNG project in Texas.
“The execution of this agreement represents continued momentum of EQT’s LNG strategy, which is focused on further diversifying the company’s end-market exposure into the rapidly growing global gas markets and accelerating long-term earnings growth,” Toby Z. Rice, EQT president and CEO said.
“Consistent with our existing LNG deals, EQT will market and optimize its own cargoes, providing structuring flexibility and downside protection,” Rice said.
Price validity period extended
NextDecade also said that it has extended the price validity period under its lump-sum turnkey engineering, procurement, and construction (EPC) contract with Bechtel Energy for Train 5 until November 15, 2025.
The total costs for Rio Grande LNG Train 5 and related infrastructure are expected to be approximately $6.7 billion.
In June, NextDecade and Bechtel finalized EPC contracts worth $9.09 billion for the construction of the fourth and fifth trains and related infrastructure at the Rio Grande LNG facility.
NextDecade has now announced a total of 3.5 mtpa of LNG from Train 5 sold under 20-year LNG SPAs and is targeting an additional 1 mtpa sold under a long-term SPA to support a positive FID on Train 5.
The company expects to complete commercialization of Train 5 in the third quarter of 2025, and subject to obtaining adequate financing, NextDecade expects to achieve a positive FID on Train 5 in the fourth quarter of 2025, prior to expiry of the revised EPC price validity period.
NextDecade also continues to expect to achieve a positive FID on Rio Grande LNG Train 4 by September 15, 2025, subject to obtaining adequate financing.
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.