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NextDecade: JERA signs 20-year LNG Supply Deal

NextDecade, a U.S. producer of liquefied gas, announced on Thursday that it had signed a deal for supplying Japan's largest power generator JERA 2 million tonnes of LNG per year from the fifth liquefaction plant in its Rio Grande Project.

Early trading saw NextDecade shares up 5.5% to $8.11.

The United States will be the largest LNG exporter in the world in 2024. It is expected to ship 11.9 billion cubic foot per day. This has been boosted by President Donald Trump lifting a moratorium in January on new export licenses.

NextDecade’s deal with JERA - Japan's largest LNG buyer - is conditional on a positive Final Investing Decision (FID) for the planned fifth liquefaction plant, or train. Japan is the second largest LNG buyer in the world.

When LNG developers have secured enough supply agreements to secure the necessary financing to build, they will typically submit a FID.

NextDecade is signing LNG deals with the Brownsville, Texas, facility which is currently under construction, and has an estimated capacity of 48 mtpa. This will help NextDecade to improve its position on the international market.

The LNG producer signed agreements with the top oil producer Saudi Aramco, and TotalEnergies, to supply superchilled natural gas from the fourth facility of the project for a period of 20 years.

Abu Dhabi National Oil Company announced last year that it had purchased a 11,7% stake in the phase 1 of NextDecade’s LNG project. This included the first three LNG liquefaction train and agreed on a 20-year deal to supply the fourth train.

The deal follows another Japanese utility's announcement that it would sign a contract for 20 years with U.S. Energy Transfer, to purchase up to one million tons of LNG per year from the Lake Charles Project.

Trump has threatened to impose tariffs on the exports of allies such as Japan and South Korea while encouraging them to purchase U.S. gas and oil. Ryosei Takazawa, Japan's chief tariff negotiator, will meet U.S. Treasury Sec. Scott Bessent in Washington on Friday for the fourth round in trade negotiations.

JERA's spokesperson confirmed that the Japanese government had not asked the company to buy U.S. LNG. The deal was finalized in April after discussions began last year. (Reporting from Katha Kalia, Bengaluru. Additional reporting by Yuka Obaashi, Tokyo. Editing by Shailesh Kumar and Mark Potter.

(source: Reuters)