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LNG Terminal Operator Signs 20-Year Export Contract
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Shares of Texas-based LNG terminal operator NextDecade Corp. traded 31% higher after the company reported it executed a binding long-term, 20-year supply agreement with Guangdong Energy Group Natural Gas Co. Ltd.

Houston, Tex.-based LNG terminal operator NextDecade Corp. (NEXT:NASDAQ), today announced "the execution of a binding Heads of Agreement (HOA) with Guangdong Energy Group Natural Gas Co. Ltd. for the long-term supply of liquefied natural gas (LNG) for 20 years from NextDecade's Rio Grande LNG export project in Brownsville, Tex."

The reported indicated that under the terms of the binding agreement, Guangdong Energy has agreed to purchase up to 1.5 Mmt of LNG yearly from NextDecade at prices indexed to the Henry Hub natural gas spot price. In addition, the agreement calls for the two firms to complete a sale and purchase agreement (SPA) in Q2/22.

The company advised that "the LNG supply will initially be from train one of Rio Grande LNG, which is expected to start commercial operations in 2026."

NextDecade's Chairman and CEO Matt Schatzman commented, "We are honored to have Guangdong Energy as the second foundation customer of our Rio Grande LNG project and our first Chinese customer…Guangdong Energy is one of the largest power generation enterprises in Guangdong and we are pleased they have entrusted us to supply their rapidly growing business."

Guangdong Energy's Chairman Zhu Zhanfang remarked, "We are pleased to be entering into a long-term SPA with NextDecade. Henry Hub-linked LNG will be an important part of our LNG portfolio as we transit to a greener future and optimize our resource procurement…We look forward to a long lasting and fruitful cooperation with NextDecade, not necessarily just in LNG supply, but potentially in carbon capture and storage as well."

NextDecade stated that assuming it succeeds in provisioning additional LNG contracts and sufficient financing, it expects to make an investment decision in H2/22 for securing a minimum of two trains of the Rio Grande LNG project.

NextDecade Corp. is headquartered in Houston, Tex. and focuses on delivering clean energy sources to achieve a net-zero future. The company claimed that "it is leading innovation in greener LNG and carbon capture solutions." The company's two wholly owned subsidiaries, Rio Grande LNG and NEXT Carbon Solutions, are presently developing a 27 Mmt per year LNG export facility in Brownsville, Tex. in conjunction with one of North America's largest carbon capture and storage projects.

According to the firm's website, Rio Grande LNG is the first and only LNG project in the U.S. capable of reducing CO2 emissions by greater than 90% via its carbon capture processes and storage. The company noted that the reduction is substantial as it is able to capture and permanently store over 5 Mmt of CO2 per year, which it points out is equivalent to the total yearly emissions produced from one million vehicles.

NextDecade began Friday with a market cap of around $595.6 million with approximately 123.8 million shares outstanding. NEXT shares opened 5% higher Friday at $5.06 (+$0.25, +5.20%) over Thursday's $4.81 closing price and reached a new 52-week high price Friday morning of $6.56. The stock traded Friday between $4.8101 and $6.56 per share.


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