TotalEnergies to Acquire Direct Stake in Rio Grande LNG’s Train 4

TotalEnergies SE said Wednesday it signed agreements with NextDecade Corp to acquire a 10 percent stake in the joint venture developing Train 4 of Rio Grande LNG (RGLNG), a liquefied natural gas (LNG) plant project located in South Texas.

In addition to the direct stake, TotalEnergies will hold around 7 percent indirectly in Train 4 as a 17.1 percent shareholder of NextDecade, the company said in a news release.

Financial terms of the agreement were not disclosed.

This fourth train, which has a capacity of approximately 6 million tons per annum (mtpa), will bring the plant’s total capacity to approximately 24 mtpa when it comes online in 2030. The project’s overall cost will be financed with approximately 40 percent equity and 60 percent debt, according to the release.

The final investment decision (FID) for Train 4 was made by TotalEnergies, NextDecade with a 40% stake, Global Infrastructure Partners (GIP) with 36.9 percent, GIC with 7.9 percent, and Mubadala with 5.2 percent.

“We are very pleased with the FID of RGLNG Train 4. This project from which we will offtake 1.5 mtpa strengthens our LNG export capacity from the United States,” TotalEnergies President of Gas, Renewables and Power Stéphane Michel said. “It gives TotalEnergies access to competitive LNG thanks to its low production costs. The LNG from this fourth train will increase TotalEnergies’ U.S. LNG export capacity to over 16 mtpa by 2030, further enhancing our ability to contribute to gas supply and building on our 10 percent market share worldwide”.

“We are pleased to have TotalEnergies, our largest LNG customer and equity partner for Phase 1 of Rio Grande LNG, extend their commitment to our project through Train 4,” NextDecade Chairman and CEO Matt Schatzman said. “LNG exported by TotalEnergies from our project will provide affordable, reliable, and secure energy to customers around the world”.

TotalEnergies said it previously signed a sales and purchase agreement with NextDecade to offtake 1.5 mtpa for 20 years of liquefied natural gas from the future Train 4. The company currently holds a 16.7 percent interest in phase 1 of Rio Grande LNG and will offtake 5.4 mtpa.

Phase 1 includes three liquefaction trains under construction in South Texas and is expected to start operations in 2027, according to the release.

NextDecade on Tuesday said it made a positive FID and issued a full notice to proceed to Bechtel Energy Inc. under the company’s lump-sum, turnkey engineering, procurement, and construction (EPC) contract for Train 4 and related infrastructure.

Train 4 is commercially supported by 4.6 mtpa of 20-year LNG sale and purchase agreements with ADNOC, TotalEnergies, and Aramco. The guaranteed substantial completion date for Train 4, as well as the date of first commercial delivery under the Train 4 LNG agreements, is expected in the second half of 2030, NextDecade said in a separate statement.

Project costs for Train 4 and related infrastructure are expected to total approximately $6.7 billion, including EPC costs, owner’s costs, contingencies, financing fees and interest during construction, and other costs, according to the statement.

“We are pleased to announce today that we have made a positive FID on Train 4 and issued full notice to proceed to Bechtel,” Schatzman said. “The global call for additional natural gas infrastructure continues to be strong, and we are well positioned to meet this growing demand for cleaner energy, with approximately [24 mtpa] of expected LNG production capacity currently under construction, Train 5 nearing a positive FID, and significant additional expansion capacity under development at the Rio Grande LNG site”.

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