TotalEnergies and GIP to financially support Rio Grande LNG terminal

US developer NextDecade is moving ahead with plans to build a fourth natural gas liquefaction train at Rio Grande in Texas. The company has now announced that it will receive up to $1.8 billion from TotalEnergies and Global Infrastructure Partners.

NextDecade is building a facility that will help the US maintain its position as the world’s largest LNG exporter. Rio Grande LNG, with a capacity of 17.6 million tonnes per year (mtpa), is currently under construction. The company expects to reach a final investment decision (FID) by 15 September on expansion projects involving trains 4 and 5, which would add a combined 10.8 mtpa of capacity.

Path to FID

The company has now announced that two major players will take part in financing the fourth train. This could help the developer reach a positive investment decision on the facility, which will have a capacity of 5.4 million tonnes per year.

TotalEnergies will contribute approximately $300 million for a 10% stake in the joint venture, while Global Infrastructure Partners (GIP) will invest up to $1.5 billion for a 50% stake, which will fall to 30% once agreed revenue thresholds are met.

NextDecade will contribute up to $1.2 billion through its subsidiaries for a 40% stake, which will rise to 60% once agreed revenue thresholds are met, Reuters reports.

What about further expansion?

TotalEnergies has a long-term agreement with NextDecade to purchase 1.5 million tonnes of LNG from the fourth train, but declined to invest in or buy LNG under a long-term contract from NextDecade’s proposed fifth export train.

NextDecade is now awaiting a final decision on the project from the Federal Energy Regulatory Commission (FERC). FERC has completed its final environmental impact report, and its staff recommended approval of the project last week. A final decision is expected by 20 November.