Houston LNG co. to sell South Texas pipeline project to Enbridge

Houston-based NextDecade Corp. (Nasdaq: NEXT) has reached a deal to sell its Rio Bravo Pipeline Company LLC to Canada-based midstream giant Enbridge Inc. (NYSE: ENB) for up to $25 million in cash.

The proposed Rio Bravo Pipeline would transport 4.5 billion cubic feet per day of natural gas from the Agua Dulce area to NextDecade’s proposed Rio Grande LNG export facility in Brownsville, Texas. In September 2019, the companies announced a memorandum of understanding to jointly pursue the development of the Rio Bravo Pipeline and other natural gas pipelines.

Now, Enbridge has agreed to own 100 percent of the pipeline company and assume all responsibility for the development, financing, construction, and operations of the Rio Bravo Pipeline. Enbridge will pay NextDecade $15 million when the deal closes and the rest when NextDecade makes a final investment decision on its Rio Grande LNG export facility. The deal is expected to close in the first quarter of 2020, and NextDecade anticipates making a final investment decision in 2020.

NextDecade will retain its rights to transport natural gas on the Rio Bravo Pipeline for at least 20 years to supply its Rio Grande LNG facility.

“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,” Matt Schatzman, NextDecade’s chairman and CEO, said in a press release. “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 27 million-tons-per-annum Rio Grande LNG terminal is expected to include gas treatment, liquefaction, and other supporting facilities and infrastructure. The terminal and its associated Rio Bravo Pipeline could amount to more than $15 billion of investment in Cameron County and are expected to create more than 5,000 jobs, according to an earlier press release.

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/02/14/houston-lng-co-to-sell-south-texas-pipeline.html