French utility company Engie SA executed a 15-year sale and purchase agreement with NextDecade Corp. for the supply of LNG from the energy company's Rio Grande LNG (RGLNG) export project in Brownsville, Texas, according to a press release on May 2.

Engie had previously pulled out of an LNG import deal with NextDecade in November 2020 citing government concerns about the project environmental implications. However, recent western sanctions on Russian fuel due to its invasion of Ukraine have shocked already tight global supplies.

Additionally, NextDecade has since made significant strides in addressing environmental concerns of the Rio Grande project, which now includes the development alongside the LNG export facility of one of the largest carbon capture and storage projects in North America.

“The signing of this [agreement] is an important step in showing our commitment in the areas of environmental stewardship, social responsibility and governance best practices while upholding the LNG industry’s highest standards," NextDecade chairman and CEO Matt Schatzman commented in the release on May 2. "It also shows how we can help meet our buyers' climate change initiatives while providing them access to secure energy supply.”

Houston-based NextDecade aims to reduce CO2 emissions from RGLNG by more than 90% via carbon capture and storage, responsibly sourced gas and the use of net-zero electricity.

Under the agreement announced May 2, Engie will purchase 1.75 million metric tonnes per annum of LNG on a free-on-board basis. The LNG supply will be from the first two trains of Rio Grande LNG, with the first train expected to start commercial operations as early as 2026.

Assuming the achievement of further LNG contracting and financing, NextDecade anticipates making a positive final investment decision (FID) on a minimum of two trains of the Rio Grande LNG export project in the second half of 2022, with FIDs of its remaining three trains to follow thereafter.

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