Houston — TotalEnergies has signed a framework agreement with the US company NextDecade to participate in the development of the Rio Grande LNG project, a liquefied natural gas (LNG) plant located in South Texas.
Under the terms of the agreement, and subject to execution of definitive documentation and final investment decision, TotalEnergies shall hold a 16.7% interest in the first phase of the project, which consists of three liquefaction trains with a total capacity of 17.5 million tons per annum (Mtpa), TotalEnergies shall offtake 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.
Also, TotalEnergies shall acquire a 17.5% interest in NextDecade in three tranches for a global amount of $219 million – the first tranche of 5,06% having already been acquired on June 13, 2023, for $40 million, and shall also have a right to participate in further phases of the project and in a carbon capture and storage project (CCS) planned by NextDecade to reduce the emissions generated by the project.
The first phase of RGLNG, whose final investment decision is expected in the coming weeks for start-up in 2027, will be developed, besides TotalEnergies, by NextDecade as shareholder and operator and Global Infrastructure Partners (GIP) as majority shareholder. The project has already received all the necessary authorizations from FERC, the US Federal Energy Regulatory Commission.
Patrick Pouyanné, Chairman and CEO of TotalEnergies said: “We are delighted to join forces with NextDecade and GIP on the development of this new US LNG project, for which TotalEnergies will leverage its extensive experience in LNG and technical expertise in major industrial project development,”.
“Our involvement in this project will add 5.4 million tons per year of LNG to our global portfolio, strengthening our ability to ensure Europe’s security of gas supply, and to provide our Asian customers with an alternative fuel to coal that emits half its CO2 emissions.”
Matt Schatzman, NextDecade Chairman and Chief Executive Officer said: “This partnership with TotalEnergies and GIP marks a momentous milestone for NextDecade, We are excited to work with GIP and TotalEnergies on RGLNG and our proposed CCS project. We are also eager to grow our partnership with GIP and TotalEnergies, focusing on our shared vision to reduce carbon emissions in the energy sector.”
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