Image: Akhilesh Sharma via Unsplash
NextDecade, a prominent U.S. liquefied natural gas (LNG) supplier, has entered a non-binding accord with Saudi Aramco to provide 1.2 million tonnes per annum (MTPA) of LNG over the next two decades, as announced by the companies on Thursday.
This strategic agreement aligns with Saudi Aramco’s broader initiative to enhance its footprint in the LNG market, projected to expand by 50% globally by 2030. The United States is expected to nearly double its LNG capacity within the next four years, making it a pivotal player in this sector.
Aramco highlighted that this deal underscores its commitment to broadening its reach in global energy markets. The LNG will be sourced from the fourth liquefaction train at NextDecade’s Rio Grande LNG Facility located at the Port of Brownsville in Texas. The U.S. emerged as the world’s top LNG exporter in 2023, surpassing Australia and Qatar, driven by supply chain disruptions and sanctions related to the conflict in Ukraine, which spiked demand and prices.
Recently, Reuters disclosed that Aramco was in discussions with NextDecade and U.S. company Tellurian regarding separate LNG ventures as the Saudi energy giant seeks to expand its gas trading and production capabilities.
Both Aramco and NextDecade are currently negotiating a binding agreement, contingent on a favorable final investment decision on Train 4, anticipated by NextDecade in the latter half of 2024.
In a related development, the Abu Dhabi National Oil Company (ADNOC) announced in May that it had acquired an 11.7% stake in the first phase of NextDecade’s LNG project, encompassing the initial three liquefaction trains. Additionally, ADNOC committed to a 20-year supply deal for the fourth train.
ADNOC has significant growth ambitions in the gas and LNG sectors, which, along with renewable energy and petrochemicals, it identifies as key drivers for future expansion. The company aims to increase its LNG capacity from 6 million metric tons per annum (mtpa) to 15 mtpa by 2028.