TotalEnergies $219 million stake in NextDecade

NextDecade Corporation, Global Infrastructure Partners (GIP), and TotalEnergies are joining forces to develop the Rio Grande LNG project in the Port of Brownsville, Texas. The companies have signed framework agreements to facilitate the final investment decision (FID) for the project's first phase, as well as to explore further development opportunities. The first phase of the project consists of three liquefaction trains with a total capacity of 17.5 million tonnes per annum (MTPA). Under the agreements, GIP will become the majority investor in Phase 1 of the project, while TotalEnergies will hold a 16.67% stake in Phase 1 of Rio Grande LNG.

TotalEnergies plans to acquire a 17.5% common stock position in NextDecade in three tranches, with a total purchase price of $219.4 million. The first tranche of $40 million of NextDecade common stock was issued and sold today at $4.9837 per share. The second tranche of $110 million will be issued and sold at the same price after the FID on Phase 1. The third tranche will be issued and sold in an amount such that the combined stock purchases equal 17.5% of the outstanding common stock of NextDecade after the closing of the third tranche. Based on current estimates, NextDecade expects to sell approximately 45.1 million shares of common stock in the aggregate to TotalEnergies at an average price per share of approximately $4.86.

These agreements also provide GIP and TotalEnergies with options to invest in Rio Grande LNG Train 4 and Train 5, as well as in a planned carbon capture and sequestration (CCS) project at Rio Grande LNG.

TotalEnergies has additionally committed to purchasing 5.4 million tonnes per annum (MTPA) of LNG from Phase 1 on a free-on-board (FOB) basis, indexed to Henry Hub. TotalEnergies will offtake the 5.4 MTPA of LNG from this first phase for twenty years, which brings the company’s US LNG export capacity to more than 15 MTPA by 2030.

At full scale, current plans call for Rio Grande LNG to be capable of producing 27 million tonnes per annum (MTPA) of LNG. NextDecade currently plans to reach FID on Phase 1 by the end of the second quarter, with plans to proceed with additional trains thereafter. The Rio Grande LNG project has already secured the necessary authorizations from the US Federal Energy Regulatory Commission (FERC). The project is expected to commence operations in 2027.