https://www.naturalgasintel.com/nextdecade-says-equity-spa-agreements-with-totalenergies-gip-clear-path-to-fid-this-month/

C0700. NextDecade - Total. 5.4 mtpa. 20 years. FOB. start in 2026.?

NextDecade Says Equity, SPA Agreements with TotalEnergies, GIP Clear Path to FID This Month

BY?JACOB DICK

June 14, 2023

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NextDecade Corp. has disclosed agreements with Global Infrastructure Partners (GIP) and TotalEnergies, and now expects to reach a final investment decision (FID) for the Rio Grande LNG project in deep South Texas later this month.

GIP has agreed to take an undisclosed majority stake in the first three liquefaction trains of the proposed Texas export project, with options to invest in two additional trains. Under the agreements, which are subject to FID, TotalEnergies would take a 16.67% stake in the first phase.

TotalEnergies also has agreed?to take 5.4 million metric ton/year (mmty) of liquefied natural gas from phase 1 for 20 years on a free on board basis indexed to U.S. benchmark Henry Hub. It also has the option to purchase LNG from a proposed expansion.

[Want today’s Henry Hub, Houston Ship Channel and Chicago Citygate prices??Check out NGI’s daily natural gas price snapshot now.]

TotalEnergies CEO Patrick Pouyanné said the agreement would increase the company’s supply of U.S. LNG to 15 mmty by 2030, “strengthening our ability to ensure Europe’s gas supply security and to provide Asian customers with an alternative fuel that emits half as much as coal.”

The agreement also shores up the remaining volumes of LNG NextDecade had targeted for long-term contracts before reaching FID. Previously, the firm had landed contracts with Asian and European customers for more than 60% of the first 17.6 mmty stage. Overall, Rio Grande is proposed to have a capacity of 27 mmty.

NextDecade is aiming to reach FID on the first three trains of the project?by the end of June, according to the firm.

The firm also has been indiciating it could fully commercialize the project by the middle of the year shortly after the Federal Energy Regulatory Commission?reaffirmed its authorization?in April. The decision came 18 months after the U.S. Court of Appeals for the District of Columbia Circuit?ordered the Commission?to review its authorizations for Rio Grande and Glenfarne Group LLC’s Texas LNG.

The firm is anticipating a capital injection before construction, as TotalEnergies also is planning to take a 17.5% stake in the company estimated at $219 million. It acquired the first of three expected tranches of stock on Tuesday for $40 million.

Both GIP and TotalEnergies are entitled to make investment decisions in NextDecade’s proposed?carbon capture and sequestration (CCS) project?in Texas. NextDecade has been seeking to amend its?2019 authorization?for Rio Grande LNG to include a CCS project since 2021. The firm estimated that its CCS design would allow it to remove 90% of the carbon dioxide (CO2) produced during the liquefaction process.

Last month, NextDecade?CEO Matthew Schatzman told NGI?the CCS project is considered an important, but separate venture and Rio Grande “is moving forward with or without the carbon capture project.”