US-based project company NextDecade has signed a 20-year sales and purchase agreement (SPA) for the delivery of 2 Mt/year of LNG from the 27 Mt/year (36.5 bcm/year) Rio Grande LNG project in Brownsville, South Texas (United States) to the global oil and gas group Shell. Shell will purchase LNG on a free-on-board basis starting from the commercial operation date of Rio Grande LNG, which is currently expected in 2023. The SPA is the first ever long-term US contract with LNG produced out of the United States to be indexed to Brent prices and comes with full destination flexibility.
The Rio Grande LNG is planned to have a 27 Mt/year (36.5 bcm/year) production capacity over six LNG trains and will be fed by the Rio Bravo pipeline that will span from the Agua Dulce area to the Brownsville export terminal. The lease for the project was signed in March 2019 and an initial terms of 30 years has been approved with two options to renew and extend the term of the lease for periods of 10 years each.
The next awaited milestone is the review of the US Federal Energy Regulatory Commission (FERC), which issued a draft environmental impact statement (EIS) for the facility in October 2018. The final EIS is expected for April 2019, the federal authorisation decision for July 2019 and the project's final investment decision (FID) is slated for the third quarter of 2019. The project is estimated requiring an investment up to US$20bn.
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