The deal, which will last for 20 years, solidifies ConocoPhillips' strategy to expand its global LNG portfolio and acts as a key step toward a final investment decision on the project's fifth liquefaction train.
ConocoPhillips Expands LNG Portfolio with Rio Grande Deal
In a significant move to bolster its position in the global liquefied natural gas (LNG) market, ConocoPhillips announced today it has entered into a 20-year sales and purchase agreement (SPA) with NextDecade Corporation (NASDAQ: NEXT). The agreement is for the offtake of 1 million tonnes per annum (MTPA) of LNG from the Rio Grande LNG project, located near Brownsville, Texas. This latest deal is contingent upon NextDecade reaching a positive final investment decision (FID) on Train 5 of the facility.
This long-term commitment marks a key milestone for both companies. For ConocoPhillips, it represents a substantial step forward in its strategic ambition to build a flexible and diverse LNG supply network. The company aims to secure a total of 10 to 15 MTPA in long-term offtake agreements to meet growing global energy demand.
"ConocoPhillips is pleased to announce our agreement with a premier operator in NextDecade at Rio Grande LNG, where we will be a key foundation customer for Train 5," said Khoa Dao, chief commercial officer for ConocoPhillips. "We're excited to help move this project closer to FID while advancing our global LNG portfolio strategy and 10 to 15 MTPA offtake ambition. We continue to build scale and diversification, adding supply and sales points offering further optionality for optimization."
The new agreement with NextDecade is another in a series of strategic deals for ConocoPhillips. Most recently, the company announced a long-term offtake agreement for 4 MTPA of LNG from Port Arthur LNG Phase 2, which follows a prior agreement for 5 MTPA of LNG from Phase 1 of that same project.
In addition to the LNG offtake, ConocoPhillips will contribute its proprietary OCP CryoSep® technology to the Rio Grande LNG facility. This technology is designed to remove heavy hydrocarbons from the feed gas, preventing them from freezing or negatively impacting the quality and heating value of the produced LNG.
For NextDecade, the agreement with ConocoPhillips is a crucial step towards securing the necessary commercial backing for the final investment decision on Train 5. The company's press release indicates that with this deal, commercialization for Train 5 is now complete, with a total of 4.5 MTPA of LNG now under long-term SPAs for that train. NextDecade expects to achieve a positive FID for Train 5 in the fourth quarter of 2025, pending adequate financing. The company also continues to expect to reach a positive FID on Train 4 by September 15, 2025.
