NextDecade to supply LNG to ExxonMobil from Texas Rio Grande plant

7/27/2022

(Reuters) - NextDecade Corp said it will supply 1 MMtpy of LNG to a unit of ExxonMobil Corp for 20 years from its proposed Rio Grande LNG export project in Brownsville, Texas.

NextDecade said the LNG will come from the first two liquefaction trains at Rio Grande, with the first train expected to start commercial operations as early as 2026.

Exonmobile Png Lng Plant

Rio Grande is one of several North American LNG export projects that delayed decisions to start construction in recent years in part because coronavirus demand destruction made customers unwilling to sign long-term deals needed to finance the multibillion-dollar facilities.

But all that changed after Russia's invasion of Ukraine on Feb. 24, prompting several countries in Europe and around the world to seek alternative gas suppliers to break their dependence on fuel from Russia.

There are currently eight companies hoping to make final investment decisions (FIDs) in 2022 to build their plants in the United States, Canada and Mexico. Many of those projects, like Rio Grande, have been delayed for years.

Based on current expected demand for LNG and assuming further LNG contracting and financing, NextDecade said it anticipates making a positive FID on up to three trains at Rio Grande in the second half of 2022, with FIDs of its remaining trains to follow thereafter.

The Rio Grande project is designed to produce about 27 MTPA of LNG through five roughly 5.4-MMtpy trains.

(Reporting by Arunima Kumar in Bengaluru and Scott DiSavino in New York; Editing by Shinjini Ganguli and Louise Heavens)