NextDecade said that it has taken a positive final investment decision (FID) on Phase 1 of the Rio Grande LNG export facility in the Port of Brownsville, Texas, which is backed by $18.4bn project financing.
Phase 1 of the project involves the construction of three liquefaction trains with a combined nameplate capacity of 17.6 million tonnes per annum (MTPA) of liquefied natural gas (LNG).
Overall, the LNG export project will have a capacity of 27MTPA from five trains.
Phase 1 is underpinned by long-term binding LNG sale and purchase agreements (SPAs) for 16.2MTPA with TotalEnergies, Shell NA LNG, ENN LNG, Engie, ExxonMobil LNG Asia Pacific, China Gas Hongda Energy Trading. Guangdong Energy Group, Itochu, and Galp Trading.
NextDecade also announced the execution and closing of a joint venture (JV) agreement for the first phase of the project. This includes financial commitments of $5.9bn from financial investors Global Infrastructure Partners (GIP), Mubadala Investment, and GIC, as well as TotalEnergies.
As per the JV agreement, NextDecade will hold equity interests that permit it to receive cash flows of up to 20.8% from Phase 1 operations.
The three financial investors and TotalEnergies will own equity interests that allow them to atleast 62.5% and 16.7% of the cash flows emerging from Phase 1 during operations, respectively.
All four parties will each have options to invest in the equities of Train 4 and Train 5 of the project. They will also have options to invest in the carbon capture and sequestration project planned to be incorporated at the LNG export facility.
According to NextDecade, the Rio Grande LNG export facility Phase 1 will see an investment of around $283m from the company. This is inclusive of pre-FID capital investments of $125m into Phase 1.
NextDecade chairman and CEO Matt Schatzman said: “Achieving FID and issuing NTP on RGLNG Phase 1 is a landmark event reflecting years of hard work and dedication by NextDecade’s employees, shareholders, construction partners, equipment suppliers, and customers.
“I want to specifically recognise the Rio Grande Valley community, the Port of Brownsville and the countless leaders and officials at the local, state, and federal levels that have supported us throughout the development of RGLNG Phase 1.”
Having made the positive FID, the Rio Grande LNG export facility issued the notice to proceed (NTP) to Bechtel Energy to start construction of Phase 1 under its lump-sum turnkey engineering, procurement, and construction contracts (EPC). The final EPC cost at NTP is around $12bn.
Earlier this month, Bechtel Energy awarded a subcontract to Baker Hughes to deliver three main refrigerant compressors (MRCs) for the project.
