ADNOC acquires 11.7% stake in NextDecade's Rio Grande LNG

Abu Dhabi National Oil Company (ADNOC) has acquired an 11.7% stake in Phase 1 (Trains 1-3) of NextDecade Corporation’s Rio Grande LNG (RGLNG) export project in Texas, it said on May 20. In addition, ADNOC and NextDecade have signed a 20-year LNG offtake agreement for 1.9mn tonnes/year from RGLNG Train 4.

The Phase 1 equity stake was obtained through an investment vehicle of Global Infrastructure Partners (GIP), with ADNOC purchasing a portion of GIP’s existing equity interest. NextDecade retains its interests in Phase 1 as well as its expansion capacity in Trains 4 and 5. This acquisition marks ADNOC’s first investment in the US.

The 20-year offtake agreement, indexed to Henry Hub prices, will see ADNOC receiving LNG on a free on board (FOB) basis, contingent on a final investment decision (FID) for Train 4.

"As global energy demand continues to increase, ADNOC is growing our diversified energy portfolio to ensure a secure, reliable, and responsible supply of energy to our customers while driving innovation and greater value," said Musabbeh Al Kaabi, ADNOC executive director for Low Carbon Solutions and International Growth.

NextDecade sanctioned the $18.4bn first phase in July 2023, completing what it said was the largest greenfield energy project financing in US history. ADNOC’s acquisition also includes an option for equity participation in future Trains 4 and 5 of the project.

NextDecade aims to reach FID on Train 4 in the second half of 2024. This decision is subject to finalising an engineering, procurement, and construction (EPC) contract, securing appropriate commercial arrangements, and obtaining sufficient financing for Train 4 and related infrastructure.