The liquefied natural gas arm of oil supermajor Royal Dutch Shell has become the first customer of NextDecade’s proposed $15 billion Rio Grande LNG export terminal at the Port of Brownsville, Texas.
NextDecade announced the 20-year sale and purchase agreement at the LNG2019 conference in Shanghai Monday night, Kallanish Energy learns.
Under the deal, Shell will buy 2 million metric tonnes of LNG annually from the proposed Brownsville facility starting in 2023. It will be the first long-term contract for LNG produced out of the U.S. to be indexed to Brent oil prices.
“We are honored to have Shell as the first foundation customer of our Rio Grande LNG project,” NextDecade CEO Matt Schatzman said, in a statement. “Shell is not only the largest portfolio LNG company in the world, Shell is also a recognized pioneer in the global LNG business.”
NextDecade has already obtained a state permit but is still seeking permission from the Federal Energy Regulatory Commission to build a liquefied natural gas export terminal along the Brownsville Ship Channel.
A federal permit decision is not expected until July but, if approved, the facility would be capable of producing up to 27 million metric tonnes per year (Mtpa) of LNG once complete.
NextDecade is expected to make its final investment decision on Rio Grande LNG during this year’s third quarter.
This post appeared first on Kallanish Energy News.