New deals with TotalEnergies and GIP to support NextDecade in reaching Rio Grande LNG FID

Texas-based energy company NextDecade has signed framework agreements with Global Infrastructure Partners (GIP), an independent infrastructure fund manager, and TotalEnergies, a French energy major, to enable the final investment decision (FID) for the Rio Grande LNG Phase 1 and to provide momentum for the further development of Train 4 and Train 5.

Illustration; Archive; Courtesy of NextDecade

Pursuant to framework agreements, GIP would become a major investor in Phase 1 and TotalEnergies would become a 16.67% investor, both subject to the execution of definitive documentation and FID.

The developer of Rio Grande LNG continues to target FID on Phase 1 by the end of the second quarter with FIDs of its remaining trains to follow thereafter.

NextDecade said the framework agreements are expected to further provide GIP and TotalEnergies options to invest in Rio Grande LNG Train 4 and Train 5 as well as an option to invest in the planned carbon capture and sequestration (CCS) project at Rio Grande LNG.

TotalEnergies has also agreed to purchase 5.4 million tonnes per annum (mtpa) of LNG from Phase 1 for 20 years on a free-on-board (FOB) basis indexed to Henry Hub and has options to purchase LNG from Train 4 and Train 5.

Furthermore, the French company will acquire, in three tranches, a 17.5% common stock position in NextDecade for an aggregate purchase price of $219.4 million.

Matt Schatzman, NextDecade Chairman and Chief Executive Officer, described the agreements with GIP and TotalEnergies as “a momentous milestone for NextDecade”.

“We are excited to work with GIP and TotalEnergies on RGLNG and our proposed CCS project at Rio Grande LNG. We are also eager to grow our partnership with GIP and TotalEnergies focusing on our shared vision to reduce carbon emissions in the energy sector.”

“With the world increasingly moving toward sustainable solutions, this partnership among GIP, TotalEnergies and NextDecade reinforces our shared commitment to helping lead the transition and shaping of the future of energy,” said Bayo Ogunlesi, Chairman and Chief Executive Officer of Global Infrastructure Partners. “This venture marks a critical step in displacing coal usage and upholds GIP’s commitment to promoting decarbonization, energy security and energy affordability. Our shared vision with TotalEnergies and NextDecade, combined with our capabilities, will undoubtedly help catalyze the development of cleaner energy.”

Patrick Pouyanné, Chairman and CEO of TotalEnergies, remarked: “We are delighted to join forces with NextDecade and GIP on the development of this new US LNG project, for which TotalEnergies shall leverage its extensive experience in LNG and technical expertise in major industrial project development. Our involvement in this project will enhance our LNG capacity by 5.4 mtpa strengthening our ability to ensure Europe’s gas supply security and to provide Asian customers with an alternative fuel that emits half as much as coal.”

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Seize the opportunity to reach business leaders, highly qualified experts and professionals across global markets and book your ticket with the Early Bird discount now available at OEEC 2023 website.