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NextDecade (NEXT) and Saudi Aramco Sign 20-Year LNG Agreement
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NextDecade Corporation (NEXT - Free Report) and Saudi Aramco have inked a non-binding Heads of Agreement (HOA) for a 20-year liquefied natural gas sale and purchase agreement. Per the terms of the agreement, Aramco will purchase 1.2 million tons per annum (MTPA) of LNG from Train 4 of NextDecade’s Rio Grande LNG project on a free-on-board basis. The price of the LNG is indexed to Henry Hub.
Both companies are actively engaged in negotiating a binding agreement. The deal is contingent upon NextDecade securing a final investment decision (FID) for Train 4 and proceeding with the project.
NEXT aims to secure an FID for Train 4 in the second half of 2024. The decision is contingent upon several conditions that include entering an engineering, procurement, and construction (EPC) contract and obtaining the commercial support and sufficient financing needed for the construction of Train 4 and the associated infrastructure.
The Saudi Arabian state-owned oil and gas producer has stated that it looks forward to finalizing the 20-year offtake agreement to expand its LNG portfolio and increase its presence in the international energy sphere. NextDecade also expects to finalize its agreement with Aramco and explore potential collaborations further.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Hess Midstream owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.
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NextDecade (NEXT) and Saudi Aramco Sign 20-Year LNG Agreement
NextDecade Corporation (NEXT - Free Report) and Saudi Aramco have inked a non-binding Heads of Agreement (HOA) for a 20-year liquefied natural gas sale and purchase agreement. Per the terms of the agreement, Aramco will purchase 1.2 million tons per annum (MTPA) of LNG from Train 4 of NextDecade’s Rio Grande LNG project on a free-on-board basis. The price of the LNG is indexed to Henry Hub.
Both companies are actively engaged in negotiating a binding agreement. The deal is contingent upon NextDecade securing a final investment decision (FID) for Train 4 and proceeding with the project.
NEXT aims to secure an FID for Train 4 in the second half of 2024. The decision is contingent upon several conditions that include entering an engineering, procurement, and construction (EPC) contract and obtaining the commercial support and sufficient financing needed for the construction of Train 4 and the associated infrastructure.
The Saudi Arabian state-owned oil and gas producer has stated that it looks forward to finalizing the 20-year offtake agreement to expand its LNG portfolio and increase its presence in the international energy sphere. NextDecade also expects to finalize its agreement with Aramco and explore potential collaborations further.
Zacks Rank and Key Picks
Currently, NEXT carries a Zacks Rank #2 (Buy).
Some othet top-ranked stocks in the energy sector are Archrock Inc. (AROC - Free Report) , SM Energy (SM - Free Report) and Hess Midstream Partners LP (HESM - Free Report) . Archrock and SM Energy presently sport a Zacks Rank #1 (Strong Buy), while Hess Midstream carries a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
SM Energy is an upstream energy firm operating in the prolific Midland Basin region and the South Texas region. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Hess Midstream owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.