US-based liquified natural gas (LNG) producer NextDecade has reached a final investment decision (FID) on Train 5 at its Rio Grande LNG project in Texas.
In addition to the FID, the company also secured full financing for Train 5 and associated infrastructure and issued a notice to proceed to Bechtel Energy.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The decision allows Bechtel to commence work under a lump-sum, turnkey engineering, procurement and construction (EPC) contract.
Train 5 is expected to produce approximately six million tonnes per annum (mtpa) of LNG, increasing the facility’s total production capacity to around 30mtpa.
It is supported by 20-year LNG sale and purchase agreements for 4.5mtpa with companies including JERA, EQT Corporation and ConocoPhillips.
The project anticipates a substantial completion and first commercial delivery date in the first half of 2031.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe total cost is projected to be around $6.7bn, covering EPC costs, owner’s costs, contingencies, financing fees and other expenses.
NextDecade chairman and CEO Matt Schatzman said: “Today, we are excited to announce that we have made a positive FID on Train 5, marking the second FID for NextDecade in just over a month.
“This achievement is the result of tireless effort by our team and our partners, and I would like to thank the entire NextDecade team, our equity partners, our Train 5 LNG customers, Bechtel, our financing partners and our local stakeholders for helping bring Train 5 FID to fruition.”
NextDecade has secured approximately $6.7bn in financing to cover the project costs, including a $3.59bn term loan facility and $500m in private placement notes through the project company Rio Grande LNG Train 5.
This financing also includes $1.29bn in equity commitments from NextDecade, and equity commitments of $1.29bn from Global Infrastructure Partners, GIC and Mubadala Investment Company.
NextDecade received $117m for development and management services from Rio Grande LNG Train 5 at financial close.
Initially holding a 50% economic interest in Train 5, NextDecade’s stake is set to rise to 70% once financial partners achieve specified returns.
The company used $233m in cash and secured $1.33bn in term loans to fund its equity commitments, avoiding a significant impact on its common shares.
The financing includes a $729m delayed draw bank facility and a $600m term loan, both with specific interest terms and conditions for repayment.
