Adnoc snaps up minority stake in Texas LNG project: Abu Dhabi National Oil Company (Adnoc) acquired an 11.7% stake in the first phase of sustainable liquefied natural gas (LNG) producer NextDecade's USD 18 bn Rio Grande LNG export facility in Texas for an undisclosed sum, according to a statement. The stake acquisition marks Adnoc’s first investment in the US.

The details: Adnoc bought a stake in the first phase, which includes the first three liquefaction trains in the facility, from Global Infrastructure Partners (GIP). NexDecade retained its share in Phase 1 alongside its shares in the the fourth and fifth proposed trains, with Adnoc having the option to buy into these. The new trains are expected to bring the facility to a full production capacity of 27 mn tonnes of LNG annually.

Adnoc and NextDecade also inked a 20-year offtake agreement, under which Adnoc will receive 1.9 mn tons of LNG annually from the project's planned Train 4 on a free-on-board basis, with the price indexed to the monthly Henry Hub benchmark. This arrangement is contingent on NextDecade's final investment decision regarding the construction of Train 4, expected in 2H 2024.

We knew this was coming: Reuters reported in March that Adnoc was in talks over an offtake agreement from NextDecade for the fourth unit of its USD 18 bn Rio Grande LNG facility.

Hailed as a “significant milestone in Adnoc’s international growth strategy,” the acquisition will provide the oil giant access to the US, “one of the world’s top LNG export markets,” Musabbeh Al Kaabi, Adnoc’s executive director for international growth said.

ICYMI #1- Adnoc has been planning to enter the US market for some time now, and is currently looking to set up a trading desk in the US as part of its global expansion plans. The oil giant is also mulling a stake acquisition in AmeriGas, the propane distribution unit of US utility holding company UGI Corp, through its subsidiary Adnoc Distribution, as part of plans to diversify away from oil.

ICYMI #2- Adnoc also has plans to ramp up LNG capacity to 15 mn tonnes per year by 2028, up from the current 6 mn tonnes, Reuters reports.

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