NextDecade has made the final investment decision for the first phase of a new LNG facility in Texas after it secured $18.4 billion in funding.
The first phase of the Rio Grande LNG will consist of three liquefaction trains, the company said in a press release, and will cost some $283 million.
The total financing sum included $5.9 billion in commitments by Global Infrastructure Partners, Saudi Mubadala Investment Company, Singapore-based investment firm GIC, and TotalEnergies.
The remainder of the funding came from loans to the tune of $11.6 billion and bonds.
The first phase of the Rio Grande LNG project will have an annual capacity of 17.6 million tons of liquefied gas annually. The full capacity of the project, when completed, should be 27 million tons.
Phase 1 has secured long-term offtake commitments from buyers including Shell, Exxon, TotalEnergies, Engie, and several Chinese energy companies, as well as Portugal's Galp, and Japan's Itochu Corporation.
Bloomberg reports NextDecade's Rio Grande Phase 1 is the third LNG project to reach a final investment decision so far this year. The other two were Venture Global's Plaquemines LNG project in Louisiana and Sempra Energy's Port Arthur facility in Port Arthur, Texas.
"Achieving FID is an important milestone in NextDecade's mission of becoming a reliable supplier of low-carbon LNG that will replace coal with a cleaner source of energy," said the chief executive of Global Infrastructure Partners.
TotalEnergies' CEO also praised the decision, saying "We are delighted with this final investment decision that enables us to launch the construction of this new LNG liquefaction plant in the United States, to which TotalEnergies will contribute its expertise in the development of major LNG projects."
U.S. LNG exports last year hit a record high as European importers rushed to secure a replacement for lost Russian pipeline gas. The new growth market is expected to remain strong this year as well. Over the longer term, however, there are doubts in Europe about whether demand for gas in any form will remain robust due to the EU's transition plans.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More