– Abu Dhabi National Oil Company (ADNOC) acquired an 11.7% stake in NextDecade’s Rio Grande LNG export facility in Texas and enters a 20-year supply agreement for the fourth liquefaction train, pending final investment decision (FID).

– ADNOC aims to expand its LNG capacity from 6 million metric tons per annum (mtpa) to 15 mtpa by 2028, viewing gas and LNG as key pillars for future growth alongside renewable energy and petrochemicals.

– The Rio Grande LNG project, expected to complete phase 1 by early 2029 at an estimated cost of $18 billion, includes five 5.4-mtpa liquefaction trains and has faced multiple delays.

Abu Dhabi National Oil Company (ADNOC) has acquired an 11.7% stake in NextDecade’s Rio Grande LNG export facility in Texas and entered into a supply agreement, marking the UAE energy giant’s first significant investment in the United States.

ADNOC stated that it acquired the stake in phase 1 of the project, which includes the first three liquefaction trains, and agreed to a 20-year supply agreement for the fourth train, pending a final investment decision (FID).

ADNOC aims to expand its gas and LNG capacity from 6 million metric tons per annum (mtpa) to 15 mtpa by 2028, considering these sectors, along with renewable energy and petrochemicals, as crucial for its future growth.

With global demand for LNG expected to rise by 50% by 2030, ADNOC, along with Saudi Aramco, is exploring opportunities in the United States, which has emerged as the world’s largest LNG exporter, supplying record volumes to Europe.

Musabbeh Al Kaabi, ADNOC’s executive director for low carbon solutions and international growth, stated that the deal “marks a significant milestone in ADNOC’s international growth strategy and provides us access to one of the world’s top LNG export markets.”

The US became the world’s largest LNG supplier in 2023, surpassing Australia and Qatar, due to increased demand from supply disruptions and sanctions related to Russia’s war in Ukraine.

NextDecade plans to begin construction of the fourth liquefaction train in the second half of 2024 following the FID. The Rio Grande LNG export plant, which has faced repeated delays, is now expected to complete phase 1 by early 2029 at an estimated cost of $18 billion. The total project includes five 5.4-mtpa liquefaction trains capable of processing about 3.6 billion cubic feet per day of natural gas.

ADNOC’s offtake agreement from the fourth train is for 1.9 mtpa “on a free on board (FOB) basis at a price indexed to Henry Hub,” subject to the FID, according to ADNOC. ADNOC acquired the stake in the first phase through an investment vehicle of Global Infrastructure Partners (GIP), purchasing a portion of GIP’s existing stake. The deal also secures ADNOC an option for equity participation in future Trains 4 and 5 of the project.