U.S. liquefied natural gas producer NextDecade (NEXT.O) said on Tuesday it had signed an agreement with a subsidiary of top oil producer Saudi Aramco (2222.SE) to supply the superchilled gas from its Rio Grande facility for 20 years.
The United States is already the world's largest exporter of LNG and producers have plans in place that would double capacity in coming years.
Aramco is seeking to become a big player in the LNG market, and had been in discussion about a supply deal with NextDecade for some time. The two signed a non-binding agreement in June 2024.
The Aramco subsidiary will purchase 1.2 million tonnes per annum of LNG from the fourth liquefaction facility, known as a train, at Rio Grande. The deal is subject to NextDecade taking a positive final investment decision (FID) on the project.
The Rio Grande LNG export plant has suffered repeated delays and been in development for years. The first train is expected to reach completion by 2027 at an expected cost of about $18 billion. The company made an FID to construct the project's first three liquefaction trains in 2023.
LNG developers typically take FIDs on projects when they have lined up enough supply deals to obtain the financing needed to build.
Aramco has shown interest in both taking equity positions in U.S. LNG projects and signing long-term LNG supply agreements with U.S. producers.
Aramco last June signed a Heads of Agreement with Sempra Infrastructure for 5 million tonnes per annum of LNG from its Port Arthur LNG Phase 2 expansion project.
The HoA could also see Aramco taking a 25% stake in the 13.5 million tonne per annum Phase 2 project should it get a financial greenlight.
