U.S. liquefied natural gas developer Next Decade will receive up to $1.8 billion in equity commitments from Total Energies and Global Infrastructure Partners to finance a fourth liquefaction plant at its Rio Grande LNG export project in Texas, the company said on Monday in a regulatory filing.
The move brings NextDecade one step closer to a positive financial decision on that 5.4 million metric tons per annum (mtpa) facility, also called Train 4.
The company is still awaiting a supplemental environmental approval for its project, even though federal regulators have completed the final environmental impact statement and last week recommended the project be allowed to proceed.
TotalEnergies will contribute about $300 million for a 10% stake in the Train 4 joint venture, while a GIP affiliate will invest up to $1.5 billion for a 50% interest, which will fall to 30% once certain return thresholds are met, NextDecade said.
NextDecade, through its subsidiaries, will provide up to $1.2 billion for a 40% interest, which could rise to 60% after GIP reaches agreed returns, according to the filing.
Total Energies has a long-term agreement with Next Decade to purchase 1.5 million metric tons of LNG from Train 4 but has declined to invest or purchase the super chilled gas on a long-term contract from Next Decade’s proposed Train 5 export facility.
NextDecade has entered into a fixed-price contract for the construction of Train 4 with Bechtel for $4.77 billion but the price is only valid until September 15, according to the company.
NextDecade is building its Rio Grande LNG facility with a capacity of 17.6 mtpa, and is developing Trains 4 and 5 with a combined additional capacity of 10.8 mtpa. The projects are expected to assist the U.S. remain as the largest LNG exporter in the world.
Source : Reuters
