NextDecade to construct the first liquefaction trains at the Rio Grande LNG export facility

The company has:

• Executed and closed a joint venture (jV) agreement for Phase 1 which included approximately US$5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala Investment Co. (Mubadala), (collectively, the Financial Investors), and TotalEnergies.
• Committed to invest approximately US$283 million in Phase 1 including US$125 million of pre-FID capital investments into Phase 1.
• Closed senior secured non-recourse bank credit facilities of US$11.6 billion, consisting of US$11.1 billion in construction term loans and a US$500 million working capital facility.
• Closed a US$700 million senior secured non-recourse private placement notes offering.

The US$18.4 billion project financing for RGLNG Phase 1 is some of the largest greenfield energy project financing in US history, and underscores the critical role that LNG and natural gas will continue to play in the global energy transition. Industry experts expect a global shortfall of LNG before 2030, which if not addressed by projects such as RGLNG, may result in a prolonged reliance on other more carbon-intensive fuels such as coal and oil.

In conjunction with making a positive FID, RGLNG issued the notice to proceed (NTP) to Bechtel Energy Inc. (Bechtel) to begin construction of Phase 1 under its lump-sum turnkey engineering, procurement, and construction contracts (EPC). The final EPC cost at NTP is approximately US$12.0 billion. The remaining expected project costs to be covered by the financing that has just closed are: owner’s costs and contingencies of approximately US$2.3 billion, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4000 acres of wetland and wildlife habitat area and installation of utilities of approximately US$600 million, and interest during construction and other financing costs of approximately US$3.1 billion.

Phase 1, with nameplate liquefaction capacity of 17.6 million tpy, has 16.2 million tpy of long-term binding LNG sale and purchase agreements (SPAs) with TotalEnergies, Shell NA LNG LLC, ENN LNG Pte Ltd, Engie S.A., ExxonMobil LNG Asia Pacific, Guangdong Energy Group, China Gas Hongda Energy Trading Co., Galp Trading S.A. and Itochu Corp.

Under the JV agreement, NextDecade will hold equity interests that entitle the company to receive up to 20.8% of the cash flows generated by Phase 1 during operations. Financial Investors and TTE will hold equity interests that entitle them to a minimum of 62.5% and 16.7% of the cash flows generated by Phase 1 during operations, respectively.

As part of the transaction, Financial Investors and TTE each have options to invest in RGLNG Train 4 and Train 5 equity, and options to invest in the planned carbon capture and sequestration (CCS) project at RGLNG. TTE’s right to invest in Train 4 and Train 5 is conditioned on exercising their LNG purchase rights of 1.5 million tpy in each of Train 4 and Train 5. The company believes these options with its partners will enable NextDecade to deliver the full FERC-approved five-train RGLNG project over time.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/13072023/nextdecade-to-construct-the-first-liquefaction-trains-at-the-rio-grande-lng-export-facility/