NextDecade greenlights Phase 1 of Rio Grande LNG Project in Brownsville

NextDecade Corporation has announced a final investment decision (FID) to proceed with the construction of the first three liquefaction trains, referred to as Phase 1, of its Rio Grande LNG (RGLNG) export facility in Brownsville, Texas.

The Rio Grande LNG facility will have a capacity of 27 million tonnes per annum (MTPA).

The decision comes after NextDecade finalized a joint venture agreement for Phase 1, securing approximately $5.9 billion in financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company, and TotalEnergies. Additionally, the company has committed to investing roughly $283 million in Phase 1, including pre-FID capital investments worth $125 million.

The company also finalized senior secured non-recourse bank credit facilities totaling $11.6 billion, alongside a $700 million senior secured non-recourse private placement notes offering. The total $18.4 billion project financing for Rio Grande LNG Project Phase 1 marks the largest greenfield energy project financing in U.S. history, highlighting the ongoing importance of LNG and natural gas in the global energy transition.

With the FID, the Rio Grande LNG Project has given Bechtel Energy Inc. the notice to proceed with the construction of Phase 1 under its lump-sum turnkey engineering, procurement, and construction contracts. The final EPC cost at NTP is estimated at $12.0 billion. The remaining project costs, approximately $6 billion, will cover owner’s costs, contingencies, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of over 4,000 acres of wetland and wildlife habitat, and interest during construction and other financing costs.

Phase 1, boasting a nameplate liquefaction capacity of 17.6 MTPA, has secured 16.2 MTPA of long-term binding LNG sale and purchase agreements with industry leaders such as TotalEnergies, Shell NA LNG LLC, and ExxonMobil LNG Asia Pacific, among others.

NextDecade’s 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.”

NextDecade will hold equity interests under the executed joint venture agreement, entitling the company to up to 20.8% of the cash flows generated by Phase 1 during operations. The Financial Investors and TotalEnergies will be entitled to at least 62.5% and 16.7% of the cash flows, respectively. They each also have options to invest in the upcoming Train 4 and Train 5 equity, and the planned carbon capture and sequestration project at the Rio Grande LNG Project.