Secures Funding Worth $1.8 Billion for Rio Grande LNG undertaking by NextDecade

NextDecade, a leading LNG developer, has announced it has secured $1.8bn in funding for the construction of Rio Grande LNG Train 4 in Brownsville, Texas. The funding comes from two major investors: TotalEnergies and Global Infrastructure Partners (GIP).

As part of the deal, GIP will pay $1.5bn for a 50% stake in Train 4. Meanwhile, NextDecade will invest $1.2bn, with the remaining 30% of the shares to be held by partners other than NextDecade once Train 4 achieves certain returns. If Train 4 reaches these returns, NextDecade's stake would rise to 60%.

GIP's stake would fall to 30% if Train 4 reaches certain returns on investment, at which point TotalEnergies will pay $300m for a 10% stake, increasing their total share to 40%.

TotalEnergies Gas & Power North America has agreed to buy 1.5 million tonnes per annum (mtpa) of LNG for 20 years from Train 4. The sale and purchase agreement is subject to a positive Final Investment Decision (FID) on Train 4, which NextDecade is targeting in September.

NextDecade has already contracted 4.6 mtpa of LNG from Train 4 on a long-term basis, with the LNG to be sold on a free-on-board basis, with the price indexed to Henry Hub.

In a recent announcement, NextDecade also revealed a 20-year, 2 mtpa LNG sale and purchase agreement with JERA for offtake from the fifth train. The company expects existing long-term commercial agreements to be sufficient to support a positive FID for Train 4.

A significant milestone was reached in August 2024 when a $4.3bn Engineering, Procurement, and Construction (EPC) contract for Train 4 was signed with Bechtel.

This investment marks a significant step forward for NextDecade and the Rio Grande LNG project, bringing the company one step closer to its goal of becoming a major player in the LNG market.