NextDecade sells stock ahead of Rio Grande LNG FID

US LNG terminal developer NextDecade has entered into a deal to sell shares worth some $35 million as it looks to take a final investment decision on the first three trains of the Rio Grande LNG export project in Texas during the first quarter.

According to a filling with the US SEC, NextDecade entered on February 3 into a common stock purchase agreement for a private placement with HGC Next Inv and Ninteenth Investment.

Under the deal, NextDecade agreed to sell an aggregate of 5,835,277 shares of the company’s common stock, par value $0.0001 per share, at a purchase price of $5.998 per share, for an aggregate purchase price of about $35 million, it said.

The private placement will close on or about February 8, 2023.

NextDecade said that each purchaser is a stockholder of the company that has the right to nominate a director to its board of directors.

The firm said it would use the proceeds of the private placement to “continue development activity in preparation for its anticipated positive final investment decision on the first three trains at its Rio Grande LNG project.”

The full project would include five trains with a capacity of 27 mtpa.

NextDecade recently signed a supply deal for the Rio Grande project with Itochu, the company’s first LNG customer from Japan.

Besides this contract, NextDecade signed deals with Portugal’s Galp, compatriot ExxonMobil, China’s ENN, Guangdong Energy, China Gas, and France’s Engie.

Prior to FID, NextDecade issued a limited notice to proceed to Bechtel last year to begin ramping up its personnel and initiate site preparation work at the Rio Grande LNG site.

Early works on the site include deep soil mixing, land clearing at test pile locations, onsite surveys, etc.

Letter to FERC

Besides selling shares, NextDecade sent a letter to the US FERC on February 6 over delays in reviewing information.

The firm has executed eight long-term sale and purchase agreements for a total of nearly 11 mtpa of US LNG, with substantial volumes dedicated for Europe, it said.

“However, to date the Commission has utterly failed to afford Rio Grande LNG any degree of
regulatory certainty by its lack of action in a reasonable timeframe,” NextDecade’s CEO, Matthew Schatzman, said in the letter.

NextDecade requests the Commission place the response to the D.C. Circuit’s remand of the Rio Grande LNG project on the February Commission agenda.

“Doing so will eliminate any regulatory uncertainty surrounding the Rio Grande LNG project. Importantly, it also will remove a cloud hanging over the Commission and its previous leadership’s failure to carry out its statutory obligations,” Schatzman said.

“If the order on remand is not on the February agenda, NextDecade requests an explanation as to why the order is not ready to be voted on despite the Commission having 18 months to prepare such an order, and a timeline for when NextDecade can expect the issuance of the remand order,” Schatzman said.

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