TotalEnergies Gets In On Rio Grande LNG Project

TotalEnergies has reached an agreement with NextDecade to participate in the development of the Rio Grande LNG project in South Texas. The deal is subject to the execution of definitive documentation and final investment decision.

Under the terms of the agreement, TotalEnergies will have a 16.7 percent interest in the first phase of the project, which consists of three trains with a total production capacity of 17.5 million tons per annum of LNG.

Additionally, TotalEnergies has agreed to offtake 5.4 Mtpa of LNG from the first phase of the project for a period of 20 years, bringing the company’s U.S. LNG export capacity to over 15 Mtpa by 2030. The company said in its statement that it has also agreed to invest in NextDecade, acquiring 17.5 percent interest for $219 million. The first tranche of 5.06 percent has already been acquired with two more remaining.

Should the project move forward, and should it reach additional phases of development, TotalEnergies said it will have the right to participate in them, 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 start-up in 2027, will be developed, besides TotalEnergies, by NextDecade as shareholder and operator and Global Infrastructure Partners (GIP) as majority shareholder. The project has already received all the necessary authorizations from FERC, the U.S. Federal Energy Regulatory Commission.

“We are delighted to join forces with NextDecade and GIP on the development of this new US LNG project, for which TotalEnergies will leverage its extensive experience in LNG and technical expertise in major industrial project development,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies. “Our involvement in this project will add 5.4 million tons per year of LNG to our global portfolio, strengthening our ability to ensure Europe's security of gas supply, and to provide our Asian customers with an alternative fuel to coal that emits half its CO2 emissions”.

“This partnership with TotalEnergies and GIP marks a momentous milestone for NextDecade,” said Matt Schatzman, NextDecade Chairman and Chief Executive Officer. “We are excited to work with GIP and TotalEnergies on RGLNG and our proposed CCS project. We are also eager to grow our partnership with GIP and TotalEnergies, focusing on our shared vision to reduce carbon emissions in the energy sector”.

“With the world increasingly moving toward sustainable solutions, this partnership among GIP, TotalEnergies and NextDecade reinforces our shared commitment to helping lead the transition and shaping of the future of energy,” said Bayo Ogunlesi, Chairman and Chief Executive Officer of Global Infrastructure Partners. “This venture marks a critical step in displacing coal usage 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 undoubtedly help catalyze the development of cleaner energy”.

Earlier this year, the company said it strengthened its position as a major player in LNG 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 provider of LNG regasification 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 back in March.

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