NextDecade Corporation announced a significant milestone in the development of its Rio Grande LNG project with the execution of a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with TotalEnergies on April 14. Under the agreement, TotalEnergies Gas & Power North America Inc, TotalEnergies’s subsidiary, will purchase 1.5 million tonnes per annum (MTPA) of LNG from Train 4 of the Rio Grande LNG facility for a period of 20 years.

This landmark SPA marks a crucial step forward for NextDecade, as it signifies sufficient commercial agreements are now in place to support a positive Final Investment Decision (FID) on Train 4. The LNG will be purchased on a free-on-board (FOB) basis at a price indexed to the Henry Hub natural gas benchmark, contingent upon a positive FID being reached for the fourth liquefaction train.

The 1.5 MTPA commitment from TotalEnergies brings the total contracted capacity from Train 4 to 4.6 MTPA on a long-term basis. NextDecade believes that its existing long-term commercial agreements are now sufficient to underpin a positive FID for the fourth train at the Brownsville, Texas, facility.

The Rio Grande LNG project is a key undertaking for NextDecade, aiming to provide cleaner energy solutions to global markets. The facility is designed to have a total export capacity of 27 MTPA across five liquefaction trains. Phase 1, consisting of the first three trains, has already secured significant commercial backing and is currently under construction.

Achieving a positive FID on Train 4 will unlock the next phase of development for the Rio Grande LNG project. However, NextDecade clarified that reaching this crucial decision is contingent upon several factors, including securing adequate financing for the construction of Train 4 and the associated infrastructure.

Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, expressed his enthusiasm about the expanded partnership with TotalEnergies. “TotalEnergies has been a key contributor to the success of Rio Grande LNG Phase 1, and we are pleased to be expanding our strategic partnership with TotalEnergies with the execution of this Train 4 SPA,” said Schatzman. He further emphasized the significance of this agreement, stating, “This SPA completes the commercial support we need for Rio Grande LNG Train 4, and we are now focused on progressing Train 4 toward a positive FID.”

The expansion of the partnership with TotalEnergies, a major player in the global LNG market, underscores the strategic importance and commercial viability of the Rio Grande LNG project.