Published: July 13, 2023 |

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NextDecade Corporation has made a positive final investment decision (FID) to construct the first three liquefaction trains (Phase 1) at the company’s 27 million tonnes per annum (MTPA) Rio Grande LNG (RGLNG) export facility in Brownsville, Texas.

The $18.4 billion project financing for RGLNG Phase 1, is the largest greenfield energy project financing in U.S. 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 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 $12 billion. The remaining expected project costs to be covered by the financing that closed are: owner’s costs and contingencies of approximately $2.3 billion, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland and wildlife habitat area, and installation of utilities of approximately $600 million, and interest during construction and other financing costs of approximately $3.1 billion.

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

“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,” said Matt Schatzman, NextDecade’s chairman and chief executive officer.

“I want to specifically recognize 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,” added Schatzman.

“Achieving FID is an important milestone in NextDecade’s mission of becoming a reliable supplier of low-carbon LNG that will replace coal with a cleaner source of energy,” said Bayo Ogunlesi, chairman and chief executive officer of Global Infrastructure Partners.

“Our investment in RGLNG affirms GIP’s commitment to promoting decarbonization, energy security, and energy affordability,” added Ogunlesi.

“We are delighted with this final investment decision that enables us to launch the construction of this new LNG liquefaction plant in the United States, to which TotalEnergies will contribute its expertise in the development of major LNG projects,” said Patrick Pouyanné, chairman and CEO of TotalEnergies.

“This project gives TotalEnergies access to competitive LNG thanks to its low production costs. LNG from this first phase will boost TotalEnergies U.S. LNG export capacity to over 15 MTPA by 2030, and thus 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,” added Pouyanné.

“Today’s announcement marks a pivotal milestone in Mubadala’s enduring partnership with NextDecade in the development of RGLNG. Mubadala is delighted to welcome GIP, GIC and TotalEnergies into the partnership as RGLNG enters its next phase of development,” said Khaled Abdulla Al Qubaisi, chief executive officer of Mubadala’s Real Estate & Infrastructure Investments platform.

“NextDecade is on a mission to produce lower-carbon intensive LNG for its customers, and we’re honored to be their partner. Today, as we commence engineering, procurement, and construction on the first phase of this project, we reaffirm our commitment to the community through quality jobs, training, and support for the supply chain and small businesses,” said Paul Marsden, president of Bechtel Energy.

Under the joint venture agreement, NextDecade will hold equity interests that entitle the company to receive up to 20.8 percent 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 percent and 16.7 percent of the cash flows generated by Phase 1 during operations, respectively.

“We look forward to delivering this important LNG project that will supply the world with reliable, and lower-carbon intensive LNG, while proudly supporting the Rio Grande Valley community by investing billions of dollars and creating thousands of much needed and well-deserved jobs,” said Schatzman.

“Now our focus turns to safely constructing Phase 1 on time and on budget and progressing commercial negotiations on RGLNG Train 4 and Train 5 to further expand our LNG platform and grow NextDecade shareholder value,” added Schatzman.

NextDecade Corporation is an energy company accelerating the path to a net-zero future. Leading innovation in more sustainable LNG and carbon capture solutions, NextDecade is committed to providing the world access to cleaner energy. Through its wholly owned subsidiaries Rio Grande LNG and NEXT Carbon Solutions, they are developing a 27 MTPA LNG export facility in South Texas along with one of the largest carbon capture and storage projects in North America. They are also working with third-party customers around the world to deploy proprietary processes to lower the cost of carbon capture and storage and reduce CO2 emissions at their industrial-scale facilities. NextDecade is headquartered in Houston, Texas.

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