TotalEnergies, NextDecade and Global Infrastructure Partners (GIP) have signed framework agreements to partner in the development of the Rio Grande LNG (RGLNG) project, a liquefied natural gas (LNG) plant located in South Texas.
The first phase of RGLNG, whose final investment decision (FID) is expected in the coming weeks for start-up in 2027, will be developed by TotalEnergies as shareholder, NextDecade as shareholder and operator and GIP as majority shareholder.
The FID includes the delivery of Trains 1, 2 and 3 (Phase 1) and will also provide momentum for the further development of RGLNG Train 4 and Train 5, with options to invest in the planned carbon capture and sequestration (CCS) project at RGLNG. GIP would become a majority investor in Phase 1, and TotalEnergies would become a 16.67 per cent investor.
In addition, TotalEnergies has agreed to purchase 5.4 million tonnes per annum of LNG from Phase 1 for 20 years on a free on board basis indexed to Henry Hub and has options to purchase LNG from Train 4 and Train 5.
At full scale, Rio Grande LNG will be capable of producing 27 million metric tonnes of low carbon intensive LNG for export to markets around the world. This is enough to meet the annual heating requirements of nearly 20 million households.
RGLNG is the first and only U.S. LNG project offering CO2 emissions reduction of more than 90 per cent via planned carbon capture and storage – capturing and permanently storing more than five million metric tonnes of CO2 per year, equivalent to removing more than one million vehicles from the road annually.
TotalEnergies Chairman and CEO Patrick Pouyanné said the project will add 5.4 million tonnes per year of LNG to the company’s global portfolio, strengthening Europe’s security of gas supply, and providing Asian customers with an alternative fuel to coal that emits half its CO2 emissions.
“We are delighted to join forces with NextDecade and GIP on the development of this new US LNG project.”
GIP Chairman and Chief Executive Officer Bayo Ogunlesi said with the world increasingly moving toward sustainable solutions, the partnership reinforces a 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 decarbonization, energy security and energy affordability.”
NextDecade continues to target FID on Phase 1 by the end of the second quarter with FIDs of its remaining trains to follow thereafter.