NextDecade takes FID on Rio Grande LNG's fifth train

NextDecade Corp has greenlit another expansion with an FID on train five at Rio Grande LNG in the US state of Texas.

The company said it closed financial transactions to fully fund the expansion project and its infrastructure, and issued full notice to proceed to Bechtel Energy.

With the FID, NextDecade is taking US$117M for development costs and management services on the project from a dedicated financial entity, Rio Grande LNG Train 5 LLC.

“Today, we are excited to announce that we have made a positive FID on train five, marking the second FID for NextDecade in just over a month,” NextDecade chairman and chief executive Matt Schatzman said. 

Train five has expected LNG production capacity of approximately 6M tonnes per annum (mta), bringing the total expected LNG production capacity under construction at Rio Grande LNG to approximately 30 mta.

NextDecade said it has agreed 4.5 mta in 20-year LNG sale and purchase agreements (SPAs) with JERA, EQT Corp and ConocoPhillips.

"The guaranteed substantial completion date for train five, as well as the date of first commercial delivery under the train five LNG SPAs, is anticipated in the first half of 2031," the company said.

Total project costs for train five and related infrastructure are expected to reach approximately US$6.7Bn, including EPC costs, owner’s costs, contingencies, financing fees and interest during construction, and other costs. The company outlined its closing on approximately $6.7Bn in financing, including a US$3.5Bn loan, half a billion dollars in private shares issued, over US$1.0Bn in company equity and US$1.3Bn in equity commitments from Global Infrastructure Partners, a part of BlackRock (GIP), GIC and Mubadala Investment Co.

NextDecade has an initial economic interest of 50% in train five, which will increase to 70% after the company’s investment partners achieve agreed returns on their investments.

NextDecade said it used US$233M in cash and entered into a total of US$1.3Bn in term loans to finance its portion equity funding commitments "without a material impact to NextDecade common shares outstanding".

NextDecade Corp’s Rio Grande LNG currently has 48 mta of liquefaction capacity under construction or in development.