US LNG terminal developer NextDecade has taken a final investment decision on the first three trains of its Rio Grande LNG export project in Texas.
NectDecade said in a statement it has executed and 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.
Under the joint venture agreement, NextDecade will hold equity interests that entitle the company to receive up to 20.8 percent of the cash flows generated by Phase 1 during operations.
Financial investors and TotalEnergies will hold equity interests that entitle them to a minimum of 62.5 percent and 16.7 percent of the cash flows generated by Phase 1 during operations, respectively.
“Largest greenfield energy project financing in US history”
NextDecade committed to invest about $283 million in Phase 1 including $125 million of pre-FID capital investments.
In addition, NextDecade closed senior secured non-recourse bank credit facilities of $11.6 billion, consisting of $11.1 billion in construction term loans and a $500 million working capital facility, and closed a $700 million senior secured non-recourse private placement notes offering.
The $18.4 billion project financing for RGLNG Phase 1 is the largest greenfield energy project financing in US history, NectDecade said.
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 Itochu.
EPC contract worth $12 billion
In conjunction with making a positive FID, NextDecade’s RGLNG issued the notice to proceed to Bechtel to begin construction of Phase 1 under its lump-sum turnkey engineering, procurement, and construction contracts.
The final EPC cost at NTP is about $12 billion, NextDecade said.
The remaining expected project costs to be covered by the financing that closed on Wednesday include owner’s costs and contingencies of about $2.3 billion and dredging for the Brazos Island harbor channel improvement project.
Other costs also include conservation of more than 4,000 acres of wetland and wildlife habitat area and installation of utilities of about $600 million, and interest during construction and other financing costs of about $3.1 billion.
NextDecade has two lump-sum turnkey EPC contracts with Bechtel for the LNG export project for the first three trains. The full project would include five trains with a capacity of 27 mtpa.
The first deal is for two LNG trains with a capacity of some 11.74 mtpa, two 180,000-cbm tanks, and one marine loading berth, while the second deal is for one LNG train with a capacity of 5.87 mtpa.
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.
Train 4 and 5
As part of the transaction, financial investors and TotalEnergies each have options to invest in RGLNG Train 4 and Train 5 equity, and options to invest in the planned carbon capture and sequestration project at RGLNG, NextDecade said.
TotalEnergies’ right to invest in Train 4 and Train 5 is conditioned on exercising their LNG purchase rights of 1.5 MTPA in each of Train 4 and Train 5, it said.
NextDecade believes these options with its partners will enable it to deliver the full FERC-approved five-train RGLNG project over time.
This is the third large LNG export project in the US to take a final decision this year after Venture Global LNG’s FID on the second Plaquemines LNG phase and Sempra Infrastructure’s FID for the first phase of its Port Arthur LNG project.