Published: March 22, 2024 |

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NextDecade is constructing and developing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel in south Texas through its partially-owned subsidiary Rio Grande. The site is located on 984 acres of land which has been leased long-term and includes 15,000 feet of frontage on the Brownsville Ship Channel.

The Rio Grande LNG Facility has received necessary approvals and authorizations required for construction, including those from the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE), which allow for development, construction, and operation of up to five trains and 27 million tonnes per annum (MTPA) of LNG exports.

“We are focused on constructing phase 1 at the Rio Grande LNG Facility safely, on time, and on budget, and delivering a positive FID of our fully permitted expansion capacity to meet growing global demand for cleaner energy sources including LNG,” said Matt Schatzman, NextDecade’s chairman and chief executive officer.

“We have a steadfast commitment to upholding the highest standards of safety and excellence in project management and are working alongside our EPC partner, Bechtel, and other counterparties to ensure that construction activities proceed smoothly and in line with contractual schedules,” added Schatzman.

“We are also actively working to capitalize on market opportunities and position the company for sustained growth through expansion of our operational footprint. With regulatory approvals in place, our train 4 and 5 expansion capacity is well-positioned to meet growing global demand for LNG. Supportive market conditions provide tailwinds to continue progressing toward FID of train 4. Commercial discussions with various potential counterparties and the FEED and EPC contracting processes are proceeding well. Our progress remains aligned with our goal of reaching a positive final investment decision for train 4 in the second half of this year,” concluded Schatzman.

SIGNIFICANT RECENT DEVELOPMENTS

• Development and Construction

Under the EPC contracts with Bechtel Energy, phase 1 progress is tracked for train 1, train 2, and the common facilities on a combined basis and train 3 on a separate basis.

As of January 2024:
• The overall project completion percentage for trains 1 and 2 and the common facilities of the Rio Grande LNG Facility was 14.3 percent, which is in line with the schedule under the EPC contract. Within this project completion percentage, engineering was 47.9 percent complete, procurement was 26.8 percent complete, and construction was 1.0 percent complete.

• The overall project completion percentage for train 3 of the Rio Grande LNG Facility was 4.4 percent, based on preliminary schedules, which is also in line with the schedule under the EPC contract. Within this project completion percentage, engineering was 3.4 percent complete, procurement was 10.6 percent complete, and construction was 0.0 percent complete.

STRATEGIC AND COMMERCIAL

The company has started the front-end engineering and design (FEED) and EPC contract processes with Bechtel for train 4 and are progressing numerous discussions with potential buyers of LNG to provide commercial support for train 4. The EPC contracting process and commercial discussions are progressing at a pace consistent with the company’s target of reaching a positive final investment decision (FID) of train 4 in the second half of 2024.

PHASE 1 (TRAINS 1-3)

Phase 1 at the Rio Grande LNG Facility is under construction. Phase 1 includes three liquefaction trains with a total nameplate capacity of 17.61 MTPA of LNG production, two 180,000 cubic meter full containment LNG storage tanks, and two jetty berthing structures designed to load LNG carriers up to 216,000 cubic meters in capacity. Phase 1 also includes associated site infrastructure and common facilities including feed gas pretreatment facilities, electric and water utilities, two totally enclosed ground flares for the LNG tanks and marine facilities, two ground flares for the liquefaction trains, roads, levees surrounding the entire site, and warehouses, administrative, operations control room, and maintenance buildings.

As of January 2024, progress on trains 1 through 3 is in line with the schedule under the EPC contracts. Recent construction activities have included the start of train 1 foundation concrete pours, piling activity for the LNG tanks, and construction of the levee and marine offloading facility. Additionally, the civil works program has progressed via the deep soil mixing program, and meaningful progress has been made on the shoreline restoration program, with the majority of shoreline reclamation nearing completion, and shoreline protection work has commenced. Bechtel has also made meaningful progress on purchase orders for train 3.

FINAL INVESTMENT DECISION ON TRAIN 4 AND TRAIN 5

NextDecade is targeting a positive FID and commencement of construction of train 4 and related infrastructure at the Rio Grande LNG Facility in the second half of 2024, and subsequently train 5 and related infrastructure. Achieving a positive FID of this fully permitted expansion capacity at the Rio Grande LNG Facility will be subject to, among other things, finalizing and entering into EPC contracts, entering into appropriate commercial arrangements, and obtaining adequate financing to construct each train and related infrastructure.

The company has commenced certain pre-FID activities for train 4, including the FEED and EPC contract processes with Bechtel. The company expects to finalize the train 4 EPC contract in the first half of 2024.

TotalEnergies has LNG purchase options of 1.5 MTPA for each of train 4 and train 5. If TotalEnergies exercises its LNG purchase options, the company currently estimates that an additional approximately 3 MTPA of LNG must be contracted on a long-term basis for each of train 4 and train 5 prior to making a positive FID for the respective train. The company continues to advance commercial discussions with various potential counter-parties and expects to finalize commercial arrangements for train 4 in the coming months to support an FID of train 4 in the second half of 2024.

NextDecade 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 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. The company is 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.

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