A sale and purchase agreement (SPA) between NextDecade and Shell was announced at the LNG2019 conference. The 20-year SPA specifies that NextDecade will provide two million tons per annum (MTPA) of LNG to Shell.
The LNG will come from NextDecade’s Rio Grande LNG export facility in Texas, which is expected to be operation in 2023. About 75% of the LNG supply will be indexed to Brent while the remaining LNG will be linked to US indices.
Further, this SPA is the first long-term LNG agreement based out of the US to be indexed to Brent and allows for variable destination.
Shell’s Vice President of LNG Marketing & Trading, Slavko Preocanin said, “LNG continues to be the fastest-growing gas supply source to 2035. 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 are honored to have Shell as the first foundation customer of our Rio Grande LNG project. 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,” stated NextDecade’s President and CEO, Matt Schatzman.
Final investment decisions for the Rio Grande project are expected in Q3 of 2019.
