US LNG firm NextDecade has secured a loan worth $356 million to finance a portion of the first phase of its Rio Grande LNG export project in Texas.
NextDecade said in a statement on Thursday it had entered into a credit agreement with a group of lenders for $356 million of senior loans.
The senior loans were disbursed in one advance for the full amount of $356 million on September 15.
Also, this resulted in a reduction in the commitments outstanding under RGLNG’s existing term loan facilities for Phase 1 from $11.1 billion to under $10.8 billion, according to NextDecade.
These senior loans will mature in July 2033, will accrue interest at a fixed rate of 6.72 percent, and rank pari passu to RGLNG’s existing term loan facilities, the $500 million working capital facility, and also the $700 million of 10-year senior notes issued at FID of Phase 1, it said.
NextDecade said this financing transaction aligns with the company’s long-term balance sheet strategy for Phase 1, which includes extending and staggering debt maturities, diversifying sources of capital, reducing bank capital over time to provide potential capacity for financing future LNG expansions, and mitigating interest rate exposure.
“As of the date hereof, RGLNG’s outstanding fixed-rate debt and executed interest rate swaps have reduced its exposure to movement in interest rates for over 80 percent of the debt currently projected to be incurred in support of Phase 1 construction,” it said.
In July, NextDecade took the final investment decision on the first three trains of its Rio Grande LNG export project in Texas and completed $18.4 billion project financing.
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.
NextDecade awarded the $12 billion EPC contract to Bechtel.
According to RGLNG’s latest construction report filed with the US FERC, the focus in August was on the set up of temporary facilities, preparing onsite parking lots, deliveries of construction equipment and material, as well as the ongoing ramp-up of contractor personnel.
Moreover, Bechtel performed land clearing and general civil site preparation activities along with commencing the development of onsite roadways, it said.