(NextDecade Corp., 5.Jul.2022) — NextDecade Corporation (NASDAQ: NEXT) announced execution of a 20-year sale and purchase agreement (“SPA”) with China Gas Hongda Energy Trading Co., LTD, a wholly-owned subsidiary of China Gas Holdings Limited (HKEX:00384) for the supply of liquefied natural gas (“LNG”) from NextDecade’s Rio Grande LNG export project (“RGLNG”) in Brownsville, Texas.
Under the SPA, China Gas will purchase 1.0 million tonnes per annum (“MTPA”) of LNG indexed to Henry Hub and delivered on a free-on-board (“FOB”) basis. The LNG will be supplied from the second train at Rio Grande LNG, which is expected to start commercial operations as early as 2027.
“We are pleased to announce the signing of this long-term SPA with China Gas, one of China’s largest natural gas distribution companies supplying approximately 43 million households across China,” said Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer. “This SPA demonstrates the continued acceleration of RGLNG’s commercial momentum and highlights our successful strategy of offering customers flexible, competitive and low carbon-intensive LNG.”
“The signing of this long-term SPA with NextDecade will further optimize China Gas’s portfolio, expand resource supply channels, and ensure that we can meet our customers’ growing demand for quality, reliable and low carbon content energy. This SPA demonstrates China Gas’s determination to unswervingly implement China’s national low-carbon energy development strategy,” said Yalong Qi, General Manager of China Gas Hongda Energy Trading Co., LTD.”
Based on current expected demand for LNG and assuming the achievement of further LNG contracting and financing, NextDecade anticipates making a positive final investment decision (“FID”) on up to three trains of the Rio Grande LNG export project in the second half of 2022, with FIDs of its remaining trains to follow thereafter.