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NextDecade Corporation NEXT recently announced a significant 20-year sale and purchase agreement with a subsidiary of Aramco for liquefied natural gas (LNG) from its Rio Grande LNG Facility in Texas. Per the terms of the agreement, Aramco will purchase 1.2 million tons per annum (mtpa) of LNG from Train 4 on a free-on-board basis, with pricing indexed to the Henry Hub’s benchmark price. This agreement is subject to a favorable Final Investment Decision (FID) on Train 4. NextDecade’s share price surged significantly following the announcement.
An Insight Into NEXT’s Rio Grande LNG Project
Situated on a 984-acre site at the Port of Brownsville, Rio Grande LNG is the largest privately funded LNG project in Texas that is set to benefit from Trump’s push to establish U.S. energy dominance. The project benefits from its proximity to the Permian Basin and Eagle Ford shale, ensuring a steady supply of natural gas with minimal weather disruptions compared to other Gulf Coast locations. The fully operational Rio Grande LNG project will have the potential to deliver enough energy to heat and cool the equivalent of nearly 34 million U.S. households annually.
With construction of Phase 1 underway, NextDecade is advancing its commercialization efforts. In June 2024, NEXT finalized a non-binding heads of agreement with Aramco for 1.2 mtpa of LNG from the fourth train. This was followed by a similar deal secured with ADNOC.
NEXT’s Rio Grande LNG project encountered several environmental and legal challenges in the past, which resulted in various uncertainties related to project construction. It was only recently that the company received legal clearance ensuring that construction at the Texas-based LNG facility can proceed without any legal roadblocks.
A Major Step for Rio Grande LNG
Train 4 of the Rio Grande LNG project has attracted strong commercial interest, and this deal with Aramco highlights the project's commercial appeal and infrastructure readiness. The company states that its long-term deal with outstanding customers validates the quality of its project.
What’s Next for NEXT?
The path to FID for Train 4 will involve finalizing additional commercial agreements and securing the necessary capital. With Aramco now on board as a long-term customer, the project is well-positioned to move forward confidently.
In 2025, NextDecade is set to finalize an engineering, procurement and construction contract for Train 5. The company is also planning further expansion, with Train 6 pre-filing expected in 2025 and full application filing in early 2026. Meanwhile, development and permitting processes for Trains 7 and 8 are in progress, positioning the Rio Grande LNG facility as a major global LNG hub.