NextDecade, Bechtel ink $4.3 billion EPC deal for fourth Rio Grande LNG train

NextDecade said its unit Rio Grande LNG Train 4 agreed to pay Bechtel about $4.3 billion for the work under the EPC contract.

Price validity under the contract extends through December 31, 2024.

NextDecade currently projects that owner’s costs, contingencies, financing fees and interest during construction will total about $1.7-1.9 billion, based on current estimates and expected interest rates.

Total estimated project costs are expected to be $6-$6.2 billion for Train 4 and related infrastructure, in line with the per train cost of the three-train Phase 1 at the Rio Grande LNG facility, which is currently under construction, it said.

Besides the final investment decision on the first three Rio Grande trains, NextDecade also last year completed $18.4 billion project financing and it awarded the $12 billion EPC contract to Bechtel.

The firm also closed a joint venture agreement for the first phase which included about $5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala, and TotalEnergies.

Phase 1, with nameplate liquefaction capacity of 17.6 mtpa, has 16.2 mtpa of long-term binding LNG sale and purchase agreements.

These include deals with TotalEnergies, Shell, ENN, Engie, ExxonMobil, Guangdong Energy Group, China Gas Hongda Energy Trading, Galp, and also Itochu.

Including trains 4 and 5, the Rio Grande LNG facility would have a capacity of 27 mtpa.

FID for fourth train in H2 2024

NextDecade confirmed it is targeting FID for the fourth train in the second half of 2024.

This remains subject to gaining appropriate commercial support and obtaining adequate financing to construct Train 4 and related infrastructure, the company said.

In June, Saudi Arabia’s energy behemoth Aramco signed a non-binding deal to buy LNG from NextDecade’s Rio Grande LNG export terminal.

Under the terms of heads of agreement, Aramco expects to buy 1.2 mtpa of LNG for 20 years from the fourth Rio Grande LNG train on a free on board basis, at a price indexed to Henry Hub.

This agreement with Aramco followed a deal with UAE’s Adnoc announced on May 10.

Adnoc purchased an 11.7 percent stake in the first phase of NextDecade’s Rio Grande LNG export terminal from Global Infrastructure Partners.

Adnoc and NextDecade also entered into a 20-year LNG offtake agreement for the fourth Rio Grande LNG train.

The LNG offtake agreement is for 1.9 mtpa from Train 4, on a FOB basis at a price indexed to Henry Hub.