NextDecade Corporation and Enbridge Inc. have announced they have entered into a definitive agreement whereby Enbridge will acquire Rio Bravo Pipeline Company, LLC (RBPL) from NextDecade.
The Rio Bravo Pipeline is designed to transport up to 4.5 billion cubic feet per day of natural gas from the Agua Dulce supply area to NextDecade’s Rio Grande LNG project in Brownsville, Texas.
The deal will go through “for a cash purchase price not to exceed $25 million, with $15 million paid at closing and the balance paid upon NextDecade’s reaching a positive final investment decision (FID) on its Rio Grande LNG export facility in the Port of Brownsville, Texas”, NextDecade said in a statement.
It added that once the transaction has been closed, Enbridge will own one hundred per cent of RBPL and assume all responsibility for the development, financing, construction, and operations of the Rio Bravo Pipeline.
Meanwhile, NextDecade will carry on taking responsibility for the development, financing, construction and operations of its Rio Grande LNG export facility.
Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, said: “As one of North America’s leading energy infrastructure companies, Enbridge brings extensive natural gas pipeline experience to execute the Rio Bravo Pipeline, and we are delighted to have them involved in supporting the delivery of our Rio Grande LNG project.”
Elsewhere, Enbridge and NextDecade have negotiated a precedent agreement, (to be executed at closing), whereby NextDecade will retain its rights to the natural gas firm transportation capacity on the Rio Bravo Pipeline for a term of at least twenty years, to supply NextDecade’s Rio Grande LNG export facility.
Bill Yardley, Enbridge’s Executive Vice President and President of Gas Transmission and Midstream, said: “Enbridge’s commitment to the development of the Rio Bravo Pipeline in support of NextDecade’s Rio Grande LNG project further strengthens our ability to serve the expanding LNG export market and fits squarely within our low-risk business model.”
In November 2019, the Federal Energy Regulatory Commission (FERC) issued an order authorising the siting, construction and operation of NextDecade’s Rio Grande LNG project and the Rio Bravo Pipeline. Then in January 2020, FERC issued a final order on rehearing for the Rio Grande LNG project and the Rio Bravo Pipeline.
NextDecade added that the agreement has been approved by the Boards of Directors of both companies. Subject to the satisfaction of certain conditions, the transaction is expected to close in the first quarter of 2020.
For more information visit www.next-decade.com