Aramco, NextDecade Sign 20-Year LNG Offtake Agreement

Subsidiaries of Aramco and NextDecade completed a non-binding heads of agreement (HoA) for a 20-year LNG purchase and sale agreement for offtake from Train 4 at Rio Grande LNG. Once the terms of the binding agreement are settled, NextDecade is targeting a final investment decision (FID) on Train 4 in the latter half of 2024.

“We are pleased to have reached an HoA with Aramco for LNG from Train 4, as Aramco seeks to expand its LNG portfolio,” said Matt Schatzman, NextDecade Chairman and Chief Executive Officer. “We look forward to finalizing the LNG SPA with Aramco and to pursuing other opportunities together.”

According to the HoA, Aramco plans to purchase 1.2 mtpa of LNG for 20 years on a free-on-board basis with price indexed to the Henry Hub. The Train 4 FID, prior to its planned finalization in late 2024, is subject to the completion and signing of an engineering, procurement, and construction contract, receiving commercial support, and obtaining the proper financing to build Train 4 and related infrastructure.

"We look forward to finalizing the terms of a long-term LNG offtake agreement with NextDecade, as we explore opportunities to expand our presence in international energy markets,” said Nasir K. Al-Naimi, Aramco Upstream President. “We expect LNG to play an important role in meeting the rising demand for secure and efficient energy.”

Last month, the Abu Dhabi National Oil Company (ADNOC) completed the acquisition of an 11.7% stake in Phase 1—Trains 1, 2, and 3—of NextDecade’s RGLNG export project. In addition, the partners established a 20-year LNG offtake agreement from RGLNG Train 4. According to the agreement, which is subject to a final investment decision, ADNOC will receive 1.9 mtpa of LNG from the project.

The acquisition of Phase 1 RGLNG equity has been achieved through an investment vehicle of Global Infrastructure Partners (GIP). ADNOC received a segment of GIP’s equity interest in Phase 1 and NextDecade will maintain its expected economic interest in this phase—it also retains interests in the Train 4 and Train 5 expansion capacity. ADNOC’s purchase of a Phase 1 equity stake in RGLNG also guarantees the option, granted by GIP, for potential equity participation in the planned Trains 4 and 5.

RGLNG is located on a 984-acre site near Brownsville, TX, and is expected to offer emissions reduction of more than 90% through a proposed carbon capture and storage (CCS) project. The CCS project is slated to capture and permanently sequester more than 5 mtpa of CO₂, which is equivalent to eliminating 1 million vehicles from the road on a yearly basis.

In April 2024, Aramco granted EPC contracts worth $7.7 billion to SAMSUNG Engineering Company, GS Engineering & Construction Corp., and Nesma & Partners for a major expansion of its Fadhili Gas Plant in eastern Saudi Arabia—the Fadhili Gas Plant Increment Project. The increase in the plant’s processing capacity, from 2.5 to up to 4 billion standard cubic feet per day (bscfd), will help the company reach its goal to increase gas production by more than 60% by 2030 in comparison to 2021 levels.