TotalEnergies and its partners have made the final investment decision (FID) to develop the first phase of Rio Grande LNG (RGLNG), an LNG project in South Texas, US.
This first phase comprises three liquefaction trains, with a total capacity of 17.5 million tpy and CAPEX of US$14.8 billion. The EPC contract has been awarded to Bechtel, and the commissioning of the plant is scheduled for 2027. The project will be financed by equity contributions from the partners, and by a debt contribution concluded today with an international banks consortium.
As a result of this decision, and according to the terms of the agreement signed in June 2023, TotalEnergies will acquire a 16.67% stake in the joint venture (JV) in charge of this first phase, and will participate in its equity contributions, for a total amount of US$1.1 billion. TotalEnergies will also hold a total 17.5% stake in NextDecade, for a total amount of US$219 million. A first tranche of 5.06% was acquired in June 2022, and a second tranche will be acquired in the next few days to increase this stake to 12.47%. A third tranche of 5.03% shall be acquired before the end of the year. TotalEnergies will also offtake 5.4 million tpy of LNG from the production of this phase for 20 years.
Patrick Pouyanné, Chairman and CEO of TotalEnergies, said: “This project gives TotalEnergies access to competitive LNG, thanks to its low production costs. LNG from this first phase will boost TotalEnergies US LNG export capacity to over 15 million tpy by 2030, and therefore, our ability to contribute to European gas security, and to provide customers in Asia with an alternative form of energy that is half as emissive as coal.”
Matt Schatzman, Chairman and CEO of NextDecade, said: “Having TotalEnergies as a key partner in the RGLNG project is an honour. Working together, we will be able to fulfill our mission to deliver lower carbon-intensive LNG to customers around the globe and we look forward to working together as construction on Phase 1 of RGLNG begins.”