NextDecade, Enbridge sign definitive agreement for Rio Bravo Pipeline in Brownsville

NextDecade Corporation and Enbridge Inc. have entered into a definitive agreement whereby Enbridge will acquire Rio Bravo Pipeline Company, LLC (RBPL) from NextDecade for a cash purchase price not to exceed US$25 million, with US$15 million paid at closing and the balance paid upon NextDecade's reaching a positive final investment decision (FID) on its Rio Grande LNG export facility in the Port of Brownsville, Texas.

Upon closing of the transaction, Enbridge will own one hundred percent of RBPL and assume all responsibility for the development, financing, construction, and operations of the Rio Bravo Pipeline. NextDecade will continue to be responsible for the development, financing, construction, and operations of its Rio Grande LNG export facility.

In addition, Enbridge and NextDecade have negotiated a precedent agreement, to be executed at closing, whereby NextDecade will retain its rights to the natural gas firm transportation capacity on the Rio Bravo Pipeline for a term of at least twenty years to supply NextDecade's Rio Grande LNG export facility.

The Rio Bravo 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. In November 2019, the Federal Energy Regulatory Commission (FERC) issued an order authorizing the siting, construction, and operation of NextDecade's Rio Grande LNG project and the Rio Bravo Pipeline.

In January 2020, FERC issued a final order on rehearing for the Rio Grande LNG project and the Rio Bravo Pipeline. The agreement has been approved by the Boards of Directors of both companies. Subject to the satisfaction of certain conditions, the transaction is expected to close in the first quarter of 2020.