US liquefied natural gas player NextDecade has reached an agreement to supply LNG from its Rio Grande LNG export project to Portuguese energy giant Galp.
Under the 20-year agreement, Galp will purchase 1.0 mtpa of LNG indexed to Henry Hub. The LNG will initially be supplied from train one of Rio Grande LNG, which is expected to start commercial operations in 2027.
Matt Schatzman, NextDecade's chairman and CEO, said the company looks “forward to helping Galp, as well as other European companies and their customers, meet their energy needs by offering a lower-cost, reliable source of LNG with lower carbon-intensity."
Galp joins ExxonMobil, ENGIE, ENN, Guangdong, and Shell in securing volumes from the first trains at the facility.
NextDecade is currently targeting a positive final investment decision (FID) on the first three trains of the reported $15 billion project during the first quarter of 2023, with FIDs of its remaining trains to follow thereafter, the company said.
Initial construction work is underway on the facility, which at full scale will be capable of producing 27 million mtpa of LNG for export to global markets. The facility also offers CO2emissions reduction of more than 90% via carbon capture and storage—capturing and permanently storing more than 5 million mtpa of CO2 per year.
In May 2019, NextDecade signed engineering, procurement, and construction contracts for the first phase of the project with Bechtel. The work scope included three liquefaction trains, two 180000 m3 storage tanks, and two marine berths totaling $9.565 billion.
