NextDecade and Shell Execute 2 MTPA, 20-Year LNG Sale and Purchase Agreement
April 01 2019 - 11:00PM
Business Wire
Approximately three-quarters of SPA volumes
indexed to Brent
NextDecade Corporation (“NextDecade”) (NASDAQ: NEXT) announced
today at the LNG2019 conference in Shanghai, a 20-year sale and
purchase agreement (“SPA”) with Shell NA LNG LLC (“Shell”) for the
supply of two million tons per annum (“MTPA”) of liquefied natural
gas (“LNG”) from NextDecade’s Rio Grande LNG export project in
Brownsville, Texas.
Pursuant to the SPA, Shell will purchase LNG on a free-on-board
basis starting from the commercial operation date of Rio Grande
LNG, currently expected in 2023, with approximately three-quarters
of the purchased LNG volumes indexed to Brent and the remaining
volumes indexed to domestic United States gas indices, including
Henry Hub.
The SPA is the first-ever long-term contract with LNG produced
out of the United States to be indexed to Brent and comes with full
destination flexibility.
“We are honored to have Shell as the first foundation customer
of our Rio Grande LNG project,” said Matt Schatzman, NextDecade’s
President and Chief Executive Officer. “Shell is not only the
largest portfolio LNG company in the world, Shell is also a
recognized pioneer in the global LNG business. Shell was the first
to sign a long-term SPA from the United States indexed to Henry Hub
in 2011, and so it is fitting they are the first to sign a
long-term SPA from a U.S. LNG project indexed to Brent. We look
forward to finalizing additional commercial agreements and to
proceeding with the development of our Rio Grande LNG project.”
“LNG continues to be the fastest-growing gas supply source to
2035,” said Slavko Preocanin, Vice President, Shell LNG Marketing
& Trading. “This agreement secures more volume for our
portfolio in the 2020s and ensures we can meet the growing demand
for secure, flexible and cleaner energy from our global customers.
We look forward to working with NextDecade in the years to
come.”
Consistent with previous guidance, pending the achievement of
further commercial milestones and receipt of requisite regulatory
approvals, NextDecade anticipates making a positive final
investment decision on up to three trains (Phase I) of the Rio
Grande LNG project by the end of the third quarter of 2019.
The Rio Grande LNG project timeline of selected events is
below:
Milestone
Date
Draft environmental impact statement October 12, 2018
Texas air quality permits December 12, 2018 FEED
endorsement certificates December 2018 Long-term site
lease agreement March 6, 2019 2 mtpa, 20-year SPA
with Shell March 28, 2019 LNG contracts to support up
to three trains 2Q-3Q 2019 Lump-sum turnkey EPC bids
to NextDecade April 22, 2019 Final environmental
impact statement April 26, 2019 Fully executed EPC
contract 3Q 2019 Federal authorization decision
deadline July 25, 2019 Final investment decision
3Q 2019
About NextDecade Corporation
NextDecade is an LNG development company focused on LNG export
projects and associated pipelines in Texas. NextDecade intends to
develop the largest LNG export solution linking Permian Basin
associated gas to the global LNG market, creating value for
producers, customers, and stockholders. Its portfolio of LNG
projects includes the 27 mtpa Rio Grande LNG export facility in
Brownsville, Texas and the 4.5 Bcf/d Rio Bravo Pipeline that would
transport natural gas from the Agua Dulce area to Rio Grande LNG.
NextDecade’s technology selections are expected to foster
operational reliability and afford NextDecade’s customers access to
reliable, low-cost, abundant natural gas from the Permian Basin,
Eagle Ford Shale, and other basins. NextDecade’s common stock is
listed on the Nasdaq Stock Market under the symbol “NEXT.”
NextDecade is headquartered in Houston, Texas. For more
information, visit www.next-decade.com.
CAUTIONARY INFORMATION ABOUT FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. The words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “potential,” “project,” “should,” “will” and
similar expressions are intended to identify forward-looking
statements, and these statements may relate to the business of
NextDecade and its subsidiaries. These statements have been based
on NextDecade’s current assumptions, expectations, and projections
about future events and involve a number of known and unknown
risks, which may cause actual results to differ materially from
expectations expressed or implied in the forward-looking
statements. These risks include uncertainties about NextDecade’s
Rio Grande LNG and Rio Bravo Pipeline projects, its ability to
secure additional debt and equity financing in the future to
complete its contemplated projects, the accuracy of the estimated
costs for the projects; governmental approval of construction and
operation of the projects; securing potential tax incentives; the
successful completion of the projects by third-party contractors;
its ability to generate cash; the development risks, operational
hazards, regulatory approvals applicable to the projects’
construction and operations activities; its anticipated competitive
advantage; the global demand for and price of natural gas (versus
the price of imported LNG); the availability of LNG vessels
worldwide; legislation and regulations relating to the LNG
industry; negotiations for the project site lease and right-of-way
options for the pipeline route; compliance with environmental laws
and regulations; the result of future financing efforts; and other
matters discussed in the “Risk Factors” section of NextDecade’s
Annual Report on Form 10-K for the year ended December 31, 2018 and
other subsequent reports filed with the Securities and Exchange
Commission, all of which are incorporated herein by reference.
Additionally, any development of the projects remains contingent
upon completing required commercial agreements; acquiring all
necessary permits and approvals; securing all financing commitments
and potential tax incentives; achieving other customary conditions;
and making a final investment decision to proceed. The
forward-looking statements in this press release speak as of the
date of this release. Although NextDecade believes that the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that the expectations will
prove to be correct. NextDecade may from time to time voluntarily
update its prior forward-looking statements, however, it disclaims
any commitment to do so except as required by securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20190401005954/en/
Investors: Kevin Smith | + 1 (832) 910 8629 |
ksmith@next-decade.comMedia: Dean Ellis | + 1 (832) 426 1872
| dellis@next-decade.com
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