TotalEnergies Buys US$219 Million Stake In NextDecade, Enters 5.4-MTPA Offtake Agreement With Rio Grande LNG
TotalEnergies unveiled a major partnership with NextDecade and Global Infrastructure Partners (GIP) that has a lot of moving parts. The headline news is that TotalEnergies is buying a 17.5% stake in NextDecade in three tranches that will total US$219 million. The first tranche of 5.06% was completed on June 13 for US$40 million. TotalEnergies didn’t say when the next two tranches will be complete. “We are delighted to join forces with NextDecade and GIP on the development of this new US liquefied natural gas [LNG] project,” said Patrick Pouyanné, chair and CEO of TotalEnergies. “Our involvement in this project will add 5.4 MTPA 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 carbon dioxide emissions.”
TotalEnergies is also boosting its liquefied natural gas (LNG) portfolio by acquiring a 16.7% interest in Phase 1 of NextDecade’s south Texas Rio Grande LNG project. Additionally, TotalEnergies is entering an offtake agreement with NextDecade for 5.4 MTPA of Rio Grande LNG’s production. If all goes according to plan, the 20-year deal will pole vault TotalEnergies’ US LNG export capacity above 15 MTPA by 2030. Anticipating further investment, TotalEnergies has the right to participate in future phases of the project.
To help advance its ESG goals, TotalEnergies plans to participate in NextDecade’s carbon capture and storage project (CCS), which will help reduce emissions of Rio Grande LNG. “This partnership with TotalEnergies and GIP marks a momentous milestone for NextDecade,” said Matt Schatzman, NextDecade chair and chief executive officer. “We are excited to work with GIP and TotalEnergies on Rio Grande LNG 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.”
As of press time, Phase 1 of the Rio Grande LNG project is expected to reach a final investment decision any day now. The project is expected to start up in 2027. NextDecade will serve as operator of the project. GIP is the majority shareholder, while TotalEnergies and NextDecade are minority shareholders. Rio Grande LNG has received all the necessary authorizations by the US Federal Energy Regulatory Commission. “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, chair and chief executive officer of GIP. “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.”
