TotalEnergies to Take LNG from Rio Grande Train 4

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--French supermajor TotalEnergies SE (NYSE:TTE) (Courbevoie, France) said its decision to buy liquefied natural gas (LNG) from the proposed Rio Grande export facility in Texas will help operator NextDecade Corporation (NASDAQ:NEXT) (Houston, Texas) make a final investment decision on future trains.

For undisclosed terms, TotalEnergies signed a 20-year sales and purchase agreement (SPA) with NextDecade to secure volumes of LNG from its planned Rio Grande export facility.

Deliveries would come from the fourth liquefaction unit, or train, at the facility. Gregory Joffroy, a senior vice president of LNG at TotalEnergies, said the agreement would support a final investment decision on that unit.

"Once effective, the agreement will help strengthen TotalEnergies' position to serve its customers with a competitive supply, as the leading exporter of LNG from the United States," he added.

NextDecade plans for an initial five-train facility that would have a peak processing capacity of 3.73 billion cubic feet per day (Bcf/d). Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can learn more from detailed project reports and a plant profile.

The company's plans were put on hold after the D.C. Circuit Court of Appeals overturned approval of the facility last year due to a lack of a suitable environmental impact statement (EIS). NextDecade in October filed a petition for a rehearing and by early April had prepared a draft EIS to address the decision, clearing a regulatory pathway toward approval.

The United States is the world leader in natural gas production and exports of LNG. Data from IIR Energy show natural gas production is subdued because of seasonal maintenance, though the volume feeding LNG export terminals remains elevated.

The U.S. Department of Energy expects LNG exports to average 14 Bcf/d this year. IIR Energy data, however, show LNG terminals churning out closer to 16 Bcf/d so far in April.

The International Energy Agency has warned that it expects the increase in LNG export capacity to outpace demand, creating a market surplus that could eat into gas prices and margins. Low prices for Henry Hub last year caused financial harm to many in the energy sector.

TotalEnergies holds a minority stake in Rio Grande and already has offtake agreements from other trains. The 20-year SPA marks NextDecade's second handshake this month, after signing a delivery deal with Saudi Aramco (Riyadh, Saudi Arabia).

Bechtel Energy (Reston, Virginia) is leading overall developments for NextDecade's construction efforts.

Elsewhere, TotalEnergies said it was committed to helping the Dominican Republic power its grid with natural gas via LNG deliveries. The company on Tuesday said it signed a heads-of-agreement deal with Energia Natural Dominicana, a joint venture between AES Dominicana and Energas.

Helping the Dominican Republic wean itself off more polluting fuels such as coal, the French company said the agreement would feed a combined-cycle power plant in the island nation that has a design capacity of 470 megawatts (MW).

TotalEnergies has one of the largest LNG portfolios in the world and aims to increase the share of natural gas in its sales mix to nearly 50% by the end of the decade.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).