Chinese utility Guangdong Energy will purchase up to 1.5 million tonnes per annum of LNG for 20 years from U.S. LNG project developer NextDecade's Rio Grande LNG.
NextDecade announced in a statement the execution of binding heads of agreement (HOA) with Guangdong Energy. The deal is for the long-term supply of LNG for 20 years from NextDecade's Rio Grande LNG.
NextDecade is developing Rio Grande LNG in the Port of Brownsville, Texas. The company says the project will produce the greenest LNG in the world. It is also the largest privately funded infrastructure project in the State of Texas.
Under the HOA, Guangdong will purchase up to 1.5 million tonnes per annum of LNG indexed to Henry Hub. The LNG supply will initially be from train one of Rio Grande LNG. NexDecade expects to start commercial operations in 2026.
Guangdong Energy and NextDecade will also complete the sale and purchase agreement (SPA) in the second quarter of 2022.
Matt Schatzman, NextDecade's CEO, said Guangdong Energy is the second foundation customer of the project and the first Chinese customer.
“Henry Hub-linked LNG will be an important part of our LNG portfolio as we transit to a greener future and optimize our resource procurement,” commented Zhu Zhanfang, chairman of Guangdong Energy. “We look forward to a long-lasting and fruitful cooperation with NextDecade, not necessarily just in LNG supply, but potentially in carbon capture and storage as well.”
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