NextDecade Announces Positive Final Investment Decision on Rio Grande LNG Phase 1

Project Overview:

• NextDecade Corporation (NASDAQ: NEXT) has made a positive final investment decision (FID) to construct the first three liquefaction trains (Phase 1) at the Rio Grande LNG (RGLNG) export facility in Brownsville, Texas.
• Phase 1 comprises three liquefaction trains with a total capacity of 17.5 million tons per annum (Mtpa) and an estimated CAPEX of $14.8 billion.
• Bechtel Energy Inc. has been awarded the engineering, procurement, and construction (EPC) contract for Phase 1, with commissioning of the plant scheduled for 2027.
  
  

Joint Venture and Financing:

• NextDecade executed and closed a joint venture agreement for Phase 1, securing approximately $5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company, and TotalEnergies.
• NextDecade committed to investing approximately $283 million in Phase 1, including $125 million of pre-FID capital investments.
• Senior secured non-recourse bank credit facilities of $11.6 billion were closed, comprising $11.1 billion in construction term loans and a $500 million working capital facility.
• Additionally, a $700 million senior secured non-recourse private placement notes offering was closed.
  
  

Project Financing and Role of LNG:

• The $18.4 billion project financing for RGLNG Phase 1 represents the largest greenfield energy project financing in U.S. history.
• This project emphasizes the critical role that LNG and natural gas will continue to play in the global energy transition.
• Experts predict a global shortfall of LNG before 2030, which makes projects like RGLNG essential to prevent a prolonged reliance on more carbon-intensive fuels.
  
  

Offtake Agreements:

• Phase 1 has secured 16.2 Mtpa of long-term binding LNG sale and purchase agreements (SPAs) with companies including TotalEnergies, Shell NA LNG LLC, ENN LNG Pte Ltd, Engie S.A., ExxonMobil LNG Asia Pacific, Guangdong Energy Group, China Gas Hongda Energy Trading Co., Galp Trading S.A., and Itochu Corporation.
  
  

Equity Stake and Offtake by TotalEnergies:

• TotalEnergies acquires a 16.67% stake in the joint venture responsible for Phase 1, with an equity contribution of $1.1 billion.
• TotalEnergies will also hold a total 17.5% stake in NextDecade, amounting to $219 million.
• The company will offtake 5.4 Mtpa of LNG from the production of Phase 1 for a duration of 20 years.
• This investment enables TotalEnergies to access competitive LNG with low production costs and boost its U.S. LNG export capacity to over 15 Mtpa by 2030.
  
  

Statements from Key Stakeholders:

• Matt Schatzman, Chairman and CEO of NextDecade, acknowledges the collective effort and support received throughout the development of RGLNG Phase 1 and looks forward to working with TotalEnergies as construction commences.
• Patrick Pouyanné, Chairman and CEO of TotalEnergies, expresses delight in the final investment decision and emphasizes the project's significance in accessing competitive LNG, contributing to European gas security, and providing cleaner energy alternatives to Asia.
• Other key stakeholders, including Bayo Ogunlesi (Chairman and CEO of GIP) and Khaled Abdulla Al Qubaisi (CEO of Mubadala's Real Estate & Infrastructure Investments platform), also express their satisfaction with the FID and partnership.
  
  

Legal Counsel and Advisors:

• Latham & Watkins LLP acted as lead outside counsel to NextDecade on the project financing transactions.
• MUFG Bank, Ltd. and Macquarie Capital (USA) Inc. served as financial advisors to NextDecade for debt and equity financing, respectively.
• Legal counsel was provided by Kirkland & Ellis LLP (GIP), Jones Day (TotalEnergies), Sidley Austin LLP (GIC), White & Case LLP (Mubadala), and Norton Rose Fulbright US LLP (lenders).