Enbridge, NextDecade Strike Pipeline Deal

Enbridge Inc. plans to acquire Rio Bravo Pipeline Co. LLC (RBPL) from NextDecade Corp. for a cash price not to exceed $25 million, with $15 million paid at closing and the rest paid upon NextDecade's reaching a positive final investment decision (FID) on its Rio Grande LNG export facility in the Port of Brownsville, Texas.

At closing, Enbridge will own 100 percent of RBPL and assume all responsibility for the development, financing, construction, and operations of the pipeline. NextDecade will continue to be responsible for the development, financing, construction, and operations of its Rio Grande LNG export facility.

NextDecade will retain its rights to the natural gas firm transportation capacity on the pipeline for at least twenty years to supply NextDecade's Rio Grande LNG export 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 written statement.

"We are excited to move forward with this transaction," added Bill Yardley, Enbridge's Executive Vice President and President of Gas Transmission and Midstream. "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."

The pipeline is designed to transport up to 4.5 billion cubic feet per day of natural gas from the Agua Dulce supply area to NextDecade's Rio Grande LNG project in Brownsville, Texas.

The transaction is expected to close in 2020.

To contact the author, email bertie.taylor@rigzone.com.