NextDecade Corporation has signed the first-ever long-term contract with LNG produced out of the United States to be indexed to Brent and comes with full destination flexibility.
The company announced a 20-year sale and purchase agreement (SPA) with Shell NA LNG LLC (Shell) for the supply of two Mtpa of LNG from NextDecade’s Rio Grande LNG export project in Brownsville, Texas.
Pursuant to the SPA, Shell will purchase LNG on a free-on-board basis starting from the commercial operation date of Rio Grande LNG, currently expected in 2023, with approximately three-quarters of the purchased LNG volumes indexed to Brent and the remaining volumes indexed to domestic United States gas indices, including Henry Hub.
“We are honored to have Shell as the first foundation customer of our Rio Grande LNG project,” said Matt Schatzman, NextDecade’s President and Chief Executive Officer. “Shell is not only the largest portfolio LNG company in the world, Shell is also a recognized pioneer in the global LNG business. Shell was the first to sign a long-term SPA from the United States indexed to Henry Hub in 2011, and so it is fitting they are the first to sign a long-term SPA from a U.S. LNG project indexed to Brent. We look forward to finalizing additional commercial agreements and to proceeding with the development of our Rio Grande LNG project.”
“LNG continues to be the fastest-growing gas supply source to 2035,” said Slavko Preocanin, Vice President, Shell LNG Marketing & Trading. “This agreement secures more volume for our portfolio in the 2020s and ensures we can meet the growing demand for secure, flexible and cleaner energy from our global customers. We look forward to working with NextDecade in the years to come.”
Consistent with previous guidance, pending the achievement of further commercial milestones and receipt of requisite regulatory approvals, NextDecade anticipates making a positive final investment decision on up to three trains (Phase I) of the Rio Grande LNG project by the end of the third quarter of 2019.
For more information visit www.next-decade.com