Rio Bravo Pipeline : NextDecade to sell associated pipeline of Rio Grande LNG project to Enbridge

NextDecade has agreed to sell the Rio Bravo Pipeline, the associated 137-mile long pipeline of its Rio Grande LNG export facility in Texas, to Enbridge for a deal worth up to $25 million.

The Rio Bravo Pipeline will comprise two 42-inch pipelines and is designed to bring up to 4.5 billion cubic feet per day of natural gas from the Agua Dulce area to the $9.56 billion Rio Grande LNG project.

Following the completion of the deal, Enbridge will take over the responsibility for the development, financing, construction, and operations of the Rio Bravo gas pipeline. On the other hand, NextDecade will continue to be responsible for the development, financing, construction, and operations of its 27 million tons per annum (mtpa) Rio Grande LNG export project.

Additionally, Enbridge and NextDecade have negotiated a precedent agreement, which will be executed at the closing of the pipeline acquisition. Under this agreement, NextDecade will keep the rights to the firm transportation capacity of the natural gas on the Rio Bravo Pipeline for at least 20 years to supply its LNG export terminal in Brownsville.

Matt Schatzman – NextDecade Chairman and CEO said: “This agreement with Enbridge further enhances our commitment to our global LNG customers, natural gas suppliers and other stakeholders to deliver our Rio Grande LNG project on time and on budget.

“As one of North America’s leading energy infrastructure companies, Enbridge brings extensive natural gas pipeline experience to execute the Rio Bravo Pipeline, and we are delighted to have them involved in supporting the delivery of our Rio Grande LNG project.”

The transaction, which is subject to the meeting of certain conditions, is likely to be wrapped up in Q1 2020.

NextDecade to sell Rio Bravo Pipeline of Rio Grande LNG project to Enbridge. Photo courtesy of Free-Photos from Pixabay.

Bill Yardley – Enbridge Executive Vice President and President of Gas Transmission and Midstream said: “Enbridge’s commitment to the development of the Rio Bravo Pipeline in support of NextDecade’s Rio Grande LNG project further strengthens our ability to serve the expanding LNG export market and fits squarely within our low-risk business model.”

In November 2019, both the Rio Grande LNG project and the Rio Bravo Pipeline secured authorization from the US Federal Energy Regulatory Commission (FERC) for its siting, construction, and operation. Last month, the FERC issued a final order on rehearing for the two midstream projects in Texas.

Earlier this month, NextDecade was granted authorization from the US Department of Energy (DOE) for export of liquefied natural gas from the Rio Grande LNG export project to non-free trade agreement (non-FTA) nations.