Aramco, NextDecade sign LNG HoA

Energy giant Saudi Aramco has signed a non-binding heads of agreement (HoA) with US-based LNG company NextDecade Corporation for offtake from Train 4 at the Rio Grande LNG facility in Texas, the companies announced on June 13.

Under the terms of the HoA, Aramco expects to purchase 1.2mn tonnes/year of LNG for 20 years on a free on board basis, at a price indexed to Henry Hub. Aramco and NextDecade are currently negotiating a binding agreement, which will become effective subject to a positive final investment decision (FID) on Train 4. In May, ADNOC bought an 11.7% stake in phase 1 of the project. 

"We look forward to finalising the terms of a long-term LNG offtake agreement with NextDecade, as we explore opportunities to expand our presence in international energy markets. We expect LNG to play an important role in meeting the rising demand for secure and efficient energy,” said Nasir K. Al-Naimi, Aramco upstream president.

NextDecade is targeting FID of Train 4 in the second half of 2024. It sanctioned the $18.4bn first phase in July 2023, completing what it said was the largest greenfield energy project financing in US history. The first phase consists of the first three trains. 

“We are pleased to have reached a heads of agreement with Aramco for LNG from Train 4, as Aramco seeks to expand its LNG portfolio. We look forward to finalising the LNG SPA with Aramco and to pursuing other opportunities together,” said Matt Schatzman, NextDecade CEO.

State-backed Saudi Aramco is also building its gas capabilities. In 2022, the company announced it would bring on stream the $100bn Jafurah onshore unconventional gas project in 2025. Recently, it announced an increase in reserves at the Jafurah.