Rio Grande LNG project : NextDecade secures $50m investment from Mubadala

US LNG development company NextDecade, the owner of the Rio Grande LNG project in the US, has secured an investment of $50 million from Mubadala Investment Company, an Abu Dhabi based state-owned investor.

In this connection, Mubadala Investment will take a minority stake in NextDecade at a price of $6.27 per share.

The investment from the Abu Dhabi investment company will further boost the capital position of NextDecade in developing the Rio Grande LNG project to be located in the Port of Brownsville, Texas. With a capacity of up to 27 million tons per annum, the Rio Grande LNG facility is expected to become the largest liquefied natural gas (LNG) export solution that will link the gas produced in the Permian Basin and Eagle Ford Shale to the global LNG market.

To be developed in multiple phases, the Rio Grande LNG project is a natural gas liquefaction and export facility that is estimated to see an investment of around $15 billion.

Illustration of Rio Grande LNG project in Texas. Photo courtesy of Mubadala Investment Company..

Matt Schatzman – Chairman and CEO of NextDecade said: “We are honored to welcome Mubadala, a leading global investor, as a shareholder in our company.

“Mubadala brings a valuable perspective on large-scale infrastructure investment and the growing role of LNG in the Middle East and other markets around the world. We look forward to a strong and lasting partnership.”

Mubadala Investment will get a seat on NextDecade’s board of directors, as part of its investment in the US LNG developer. The Abu Dhabi investor will also get the right to contribute a certain amount of project-level capital following a final investment decision taken on the Rio Grande LNG project, which is expected to be made in Q1 2020.

Khalifa Al Romaithi – Mubadala Midstream Executive Director said: “We are pleased to make this investment in NextDecade. We strongly believe that the Rio Grande LNG project is optimally positioned to provide a highly competitive export route for the abundant gas resources of the Permian Basin and a compelling commercial proposition for LNG customers, Permian producers and NextDecade shareholders alike.

“Our investment also reflects Mubadala’s positive outlook on the global gas market and the growing role of gas in the energy transition.”

Phase one of the Texan LNG export project, which will see an investment of $9.565 billion, will involve the installation of three liquefaction trains, each with a capacity of up to 5.87 million tons per annum (mtpa). The remaining three

The Rio Grande LNG project will have a total of four full containment LNG tanks – each having a capacity of storing 180,000m3 of LNG.  The LNG project in Texas will have deepwater port access with supporting marine infrastructure, a couple of marine jetties, berth pocket, and a turning basin.

The Rio Grande LNG project will be equipped with technology provided by ABB, Air Products, and Baker Hughes. Bechtel, on the other hand, holds the engineering, procurement, construction contract.

The LNG project in Texas will include the construction of the 137km long Rio Bravo Pipeline, which will provide it with gas produced from the Agua Dulce area. The Rio Grande LNG project is scheduled to begin operations in 2023.