NextDecade enters loan as it works on FID for fourth Rio Grande LNG train

US LNG firm NextDecade has entered into a credit agreement as it works to take a final investment decision to build the fourth liquefaction train at its Rio Grande LNG export project in Texas.

The company’s unit NextDecade LNG has entered into a credit agreement with MUFG Bank as lender and administrative agent that provides for a $50 million senior secured revolving credit facility and a $12.5 million interest term loan.

NextDecade said borrowings under the credit facility may be utilized for general corporate purposes, including development costs related to Rio Grande train 4.

Also, the firm said that borrowings under the interest term loan may be utilized to pay interest expense, fees, and other expenses related to the revolving credit facility.

The credit facility and the term loan mature at the earlier of two years from the closing date or 10 business days after an FID on train 4 at the Rio Grande LNG facility.

NextDecade expects the credit facility to provide “meaningful” liquidity and capital resources as the company progresses toward a positive FID of train 4, it said.

Train 4 FID in H2 2024

The firm has started the front-end engineering and design (FEED) and EPC contract processes with Bechtel Energy for train 4 and expects to finalize the EPC contract in the first half of 2024.

NextDecade said it is progressing “numerous discussions” with potential buyers of LNG to provide commercial support for the fourth train and is targeting a positive FID on the project in the second half of 2024.

The firm said in a project update in November last year that it expects to sanction the fourth liquefaction train in the second half of 2024.

In July, NextDecade took the final investment decision on the first three Rio Grande trains and completed $18.4 billion project financing. 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.

TotalEnergies also has LNG purchase options of 1.5 mtpa for each of train 4 and train 5.

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

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