TotalEnergies will obtain a 16.7% interest in the first phase of the project, offtake 5.4Mtpa LNG from the project for 20 years and acquire a 17.5% common stock position in NextDecade for a total of $219.4m, in three tranches
TotalEnergies, GIP, NextDecade to develop RGLNG project. (Credit: Tasos Mansour on Unsplash)
TotalEnergies, NextDecade and Global Infrastructure Partners (GIP) have signed a framework agreement to develop Rio Grande LNG (RGLNG) project in South Texas.
Under the terms of the agreement, TotalEnergies will obtain a 16.7% interest, and offtake 5.4Mtpa of LNG from the first phase of the project for 20 years.
The energy company will also acquire a 17.5% common stock position in NextDecade for a purchase price of $219.4m, paid in three tranches.
NextDecade will be a shareholder and operator of the RGLNG project, while Global Infrastructure Partners (GIP) will be the majority shareholder.
In addition, TotalEnergies can participate in further phases of the project and a carbon capture and storage project (CCS) to reduce the project’s carbon emissions.
TotalEnergies chairman and CEO Patrick Pouyanné 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.”
Phase 1 development involves the installation of three liquefaction trains, RGLNG Trains 1, 2 and 3, with a total annual capacity of 17.5 million tons per annum (Mtpa).
The partnership also provides further options to invest in RGLNG Train 4 and Train 5 and options to invest in the planned carbon capture and sequestration (CCS) project at RGLNG.
The final investment decision (FID) on Phase 1 is expected by the end of the second quarter, and start-up in 2027, with FIDs of the remaining phases to follow thereafter.
The project has secured all the required authorisations from the US Federal Energy Regulatory Commission (FERC).
Global Infrastructure Partners chairman and CEO Bayo Ogunlesi said: “With the world increasingly moving toward sustainable solutions, this partnership among GIP, TotalEnergies and NextDecade reinforces our shared commitment to helping lead the transition and shaping of the future of energy.
“This venture marks a critical step in displacing coal usage and upholds GIP’s commitment to promoting decarbonisation, energy security and energy affordability.
“Our shared vision with TotalEnergies and NextDecade, combined with our capabilities, will undoubtedly help catalyse the development of cleaner energy.”