NextDecade to secure $1.8bn from TotalEnergies and GIP for Rio Grande LNG project

NextDecade, through its subsidiaries, will invest up to $1.2bn for a 40% interest. Credit: T. Schneider/Shutterstock.com.

NextDecade, a US liquefied natural gas (LNG) developer, is set to secure up to $1.8bn in equity commitments from TotalEnergies and Global Infrastructure Partners (GIP), reported Reuters.

The proceeds are intended for the financing of a new liquefaction plant at NextDecade’s Rio Grande LNG export project in Texas.

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This funding marks a significant step towards the final investment decision (FID) for the export facility’s Train 4, which will have a capacity of 5.4 million tonnes per annum (mtpa).

The company is currently awaiting a final order from the Federal Energy Regulatory Commission (FERC), which has completed the environmental impact statement (EIS) and recommended the project’s advancement.

NextDecade expects to receive the final order by 20 November.

TotalEnergies is set to invest around $300m for a 10% stake in the Train 4 joint venture, while a GIP affiliate will contribute up to $1.5bn for a 50% interest, which will be reduced to 30% once certain returns are achieved.

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NextDecade, through its subsidiaries, will invest up to $1.2bn for a 40% interest, potentially increasing to 60% following GIP’s receipt of agreed returns.

Despite TotalEnergies’ commitment to purchase 1.5 million tonnes of LNG from Train 4, the company has opted not to invest in or sign a long-term contract for NextDecade’s proposed Train 5 facility.

NextDecade has also secured a fixed-price construction contract with Bechtel for Train 4, totalling $4.77bn, with the price guaranteed until 15 September.

The Rio Grande LNG project, with an initial capacity of 17.6mtpa, will be expanded by developing Trains 4 and 5, adding a combined capacity of 10.8mtpa.

These developments aim to maintain the US’ position as the world’s largest LNG exporter.

Additionally, NextDecade’s subsidiaries have updated the engineering, procurement and construction (EPC) contract with Bechtel Energy for Train 4 and signed a new EPC agreement for Train 5, both at the site in Brownsville, Texas.