NextDecade greenlights investment on Rio Grande LNG Train 5

NextDecade Corporation has made a positive final investment decision (FID) on Train 5 at its Rio Grande LNG facility, closed financial transactions to fully fund the expansion, and issued a full notice to proceed to Bechtel Energy for its construction.

Train 5, expected to have an LNG production capacity of approximately six million tonnes per annum (MTPA), brings the total expected capacity under construction at Rio Grande LNG to about 30 MTPA.

The company said the new train is commercially supported by 4.5 MTPA of 20-year LNG sale and purchase agreements with JERA, EQT Corporation, and ConocoPhillips. The guaranteed substantial completion date and first commercial delivery date are anticipated in the first half of 2031.

Project costs for Train 5 and related infrastructure are expected to total approximately $6.7 billion.

To fully fund these costs, NextDecade closed on approximately $6.7 billion in committed financing, comprising a $3.59 billion term loan facility, $0.50 billion in private placement notes, and $1.29 billion each in equity commitments from NextDecade and its partners Global Infrastructure Partners, GIC, and Mubadala Investment Company.

NextDecade received $117 million at financial close for development costs and management services. Its initial economic interest in Train 5 is 50 per cent, increasing to 70 per cent after financial investors achieve certain returns.

NextDecade financed its equity commitment using $233 million of cash on hand and entering into $1.33 billion in term loans, structured to avoid material impact on its outstanding common shares.

Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer noted that this is the company's second positive FID in just over a month.