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Enbridge to buy Rio Bravo from NextDecade
Posted on Friday, 14 February 2020 11:32
Private equity firm Enbridge has agreed to acquire the Rio Bravo Pipeline Company from NextDecade for USD 25.00 million in cash.
Under the terms of the deal, the buyout group will pay USD 15.00 million at closing and the balance when the vendor reaches a positive final investment decision on its Rio Grande liquified natural gas (LNG) export facility in the Port of Brownsville, Texas.
Enbridge will own one hundred per cent of Rio Bravo and assume all responsibility for the development, financing, construction and operations.
NextDecade will retain control of the Rio Grande LNG export facility.
The two companies have also held negotiations on a precedent agreement to be executed at closing, where the Texas-based pipeline development group will retain its rights to the natural gas firm transportation capacity on the Rio Bravo pipeline for a term of 20 years to supply the Rio Grande project.
Both boards have given the green light to the deal, which remains subject to the usual raft of conditions, with completion slated to take place in the first quarter of 2020.
Rio Bravo is designed to transport up to 4.50 billion cubic feet per day of natural gas from the Agua Dulce supply area to NextDecade’s Rio Grande facility.
In November 2019, the Federal Energy Regulatory Commission issued an order authorising the siting, construction and operation of the project and the pipeline.
Matt Schatzman, chief executive of NextDecade, said: “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.
“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.”
Shares in NextDecade closed up slightly to USD 4.93 yesterday, giving the group a market capitalisation of USD 595.42 million.
In the nine months ended 30th September 2019, the company recorded total operating loss of USD 22.48 million, compared to a loss of USD 30.88 million in the corresponding period of 2018.
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