NextDecade Corporation, a LNG development company, has recently entered into a definitive agreement with energy transportation firm Enbridge Inc. under which Enbridge would purchase NextDecade’s Rio Bravo Pipeline Company, LLC (RBPL) for almost $25 million.
The arrangement intends to pay $15 million at closing and the remaining upon successfully reaching a final investment decision (FID) on Rio Grande’s LNG export plant located in Port of Brownsville, Texas.
After the completion of this transaction, Enbridge would completely own RBPL and handle all responsibilities like financing, development, operations, and construction of Rio Bravo Pipeline. However, NextDecade would still monitor the financing, development, operations, and construction of the Rio Grande LNG export plant.
According to reliable sources, NextDecade and Enbridge have agreed upon a precedent deal which is to be implemented at closing, whereby the LNG company would retain its rights to Rio Bravo Pipeline transportation capacity for a term of twenty years.
Speaking on the move, Matt Schatzman, Chairman and Chief Executive Officer, NextDecade, said that this deal with Enbridge further their commitment to its global LNG natural gas suppliers, consumers, and other shareholders to launch its Rio Grande LNG project on budget and on time.
Schatzman added that Enbridge comes as North America’s prominent energy infrastructure firm and, after the completion of this transaction, would hugely contribute to its natural gas pipeline experience to the Rio Bravo Pipeline. Moreover, the company is delighted that Enbridge is involved in backing the delivery of its Rio Grande LNG plant.
Reportedly, prior to this news, NextDecade had made headlines when it revealed that the U.S. Department of Energy (DOE) has authorized it to export LNG (liquefied natural gas) from its Rio Grande LNG unit to non-FTA (non-free trade agreement) nations.
In conjunction with its previously issued free trade agreement (FTA), NextDecade is currently permitted to export 1,318 billion cubic feet of natural gas per year equivalent LNG from Rio Grande LNG to both non-FTA and FTA nations.