TotalEnergies has reached an agreement with NextDecade to participate in the development of the Rio Grande LNG project in South Texas. The operation is subject to the execution of the final documentation and the final investment decision.
Under the terms of the agreement, TotalEnergies will have a 16.7 percent stake in the first phase of the project, which consists of three trains with a total production capacity of 17.5 million tons of LNG per year.
In addition, TotalEnergies has agreed to take 5.4 Mtpa of LNG from the first phase of the project over a 20-year period, bringing the company’s US LNG export capacity to more than 15 Mtpa per year 2030. The company said in its statement that it has also agreed to invest in NextDecade, acquiring a 17.5% interest for $219 million. The first tranche of 5.06 percent has already been acquired with two more remaining.
If the project moves forward and reaches additional phases of development, TotalEnergies said it will have the right to participate in it, as well as in the carbon capture and storage (CCS) project planned by NextDecade to reduce emissions generated by the project. .
The first phase of RGLNG, whose final investment decision is expected in the coming weeks for commissioning in 2027, will be developed, in addition to TotalEnergies, by NextDecade as shareholder and operator and Global Infrastructure Partners (GIP) as majority shareholder. The project has already received all necessary authorizations from FERC, the US Federal Energy Regulatory Commission.
“We are delighted to join forces with NextDecade and GIP in the development of this new US LNG project, for which TotalEnergies will leverage its extensive LNG experience and technical expertise in the development of large industrial projects,” said Patrick Pouyanné, president and CEO of TotalEnergies. . “Our participation in this project will add 5.4 million tonnes per annum of LNG to our global portfolio, strengthening our ability to ensure security of gas supply to Europe and to offer our Asian customers an alternative fuel to coal that emits half of its CO2 emissions”. .
“This partnership with TotalEnergies and GIP marks a momentous milestone for NextDecade,” said Matt Schatzman, president and CEO of NextDecade. “We are delighted to be working with GIP and TotalEnergies on RGLNG and our proposed CCS project. We are also looking forward to growing our partnership with GIP and TotalEnergies, focusing on our shared vision to reduce carbon emissions in the energy sector” .
“With the world increasingly moving towards sustainable solutions, this partnership between GIP, TotalEnergies and NextDecade reinforces our shared commitment to help lead the transition and shape the future of energy,” said Bayo Ogunlesi, President and CEO of Global Infrastructure Partners. “This company marks a critical step in shifting the use of coal and upholds GIP’s commitment to promoting decarbonization, energy security and energy affordability. Our shared vision with TotalEnergies and NextDecade, combined with our capabilities, will help without a doubt to catalyze the development of cleaner energy”.
Earlier this year, the company said it strengthened its position as a major LNG player with its entry into the NFE and NFS projects in Qatar and noted that it increased its sales by 15 percent in 2022 to reach 48 Mt, “thanks to the strong call for LNG in Europe”.
“Thanks to its position as the largest LNG regasification provider in Europe, TotalEnergies contributed significantly to the continent’s security of supply by covering more than 20 percent of Europe’s LNG needs,” the company noted in the March.
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