Saudi Aramco, the state-owned oil company of Saudi Arabia, and NextDecade, a U.S. liquefied natural gas (LNG) provider, announced that their respective subsidiaries have signed a non-binding agreement, known as a Heads of Agreement (HoA). Furthermore, this HoA outlines the terms for a 20-year LNG sale and purchase agreement (LNG SPA) for offtake from the fourth train (Train 4) at NextDecade’s Rio Grande LNG Facility located at the Port of Brownsville, Texas.
Under the terms of the HoA, Aramco expects to purchase 1.2 million tons per annum (MTPA) of LNG for 20 years on a free-on-board basis, with the price indexed to the Henry Hub natural gas benchmark. Additionally, Aramco and NextDecade are currently in the process of negotiating a binding agreement, and the effectiveness of this agreement will be subject to a positive Final Investment Decision on the development of Train 4 at the Rio Grande LNG Facility.
Read more: Saudi Aramco reports Q1 2024 net income of $27.2 billion
“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 Aramco Upstream president Nasir K. Al-Naimi.
“We expect LNG to play an important role in meeting the rising demand for secure and efficient energy,” he added.
Moreover, NextDecade Chairman and CEO Matt Schatzman said: “We are pleased to have reached a Heads of Agreement with Aramco for LNG from Train 4, as Aramco seeks to expand its LNG portfolio.”
He further added, “We look forward to finalizing the LNG SPA with Aramco and to pursuing other opportunities together.”
For more news on sustainability, click here.
