NextDecade Corporation announced that it has made a positive final investment decision (FID) on Train 5 at Rio Grande LNG, closed financial transactions to fund the project fully, and issued full notice to proceed to Bechtel Energy Inc. for construction. This marks NextDecade's second positive FID in just over a month, with the company successfully securing approximately USD 6.7 billion in committed financing to fully fund the expected costs for Train 5 and related infrastructure.

Project Specifications and Commercial Framework

Train 5 has an expected LNG production capacity of approximately 6 million tonnes per annum (MTPA), bringing the total expected LNG production capacity under construction at Rio Grande LNG to approximately 30 MTPA. The project operates under a lump-sum, turnkey engineering, procurement, and construction (EPC) contract with Bechtel for Train 5 and related infrastructure.

The project is commercially supported by 4.5 MTPA of 20-year LNG Sale and Purchase Agreements (SPAs) with three major companies: JERA, EQT Corporation, and ConocoPhillips. The guaranteed substantial completion date for Train 5, as well as the date of first commercial delivery under the Train 5 LNG SPAs, is anticipated in the first half of 2031.

Financial Structure and Funding Sources

Project costs for Train 5 and related infrastructure are expected to total approximately USD 6.7 billion, including EPC costs, owner's costs, contingencies, financing fees and interest during construction, and other costs. The financing structure includes a USD 3.59 billion term loan facility and USD 0.50 billion in private placement notes for Rio Grande LNG Train 5, LLC.

The equity portion of the funding consists of USD 1.29 billion in equity commitments from NextDecade and USD 1.29 billion in equity commitments from partners, including Global Infrastructure Partners (a part of BlackRock), GIC, and Mubadala Investment Company, collectively referred to as the Financial Investors. NextDecade received USD 117 million at financial close from Rio Grande LNG Train 5, LLC for development costs and management services.

Ownership Structure and NextDecade's Financing Strategy

NextDecade has an initial economic interest of 50% in Train 5, which will increase to 70% after the Financial Investors achieve certain returns on their investments. To finance its portion of Train 5 equity funding commitments, NextDecade used USD 233 million of cash on hand and entered into a total of USD 1.33 billion in term loans without a material impact on NextDecade's common shares outstanding.

The company's financing includes two loans: a USD 729 million delayed draw bank facility (FinCo Loan) with SOFR + 350 basis points, cancellable commitments, and prepayment flexibility; and a USD 600 million term loan (SuperFinCo Loan) disbursed at close, with 13% interest payable in kind until a year after Train 5's completion, callable at par starting September 2030.

Company Leadership and Stakeholder Acknowledgments

Matt Schatzman, NextDecade's Chairman and Chief Executive Officer, commented on the achievement, stating: “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 Corporation is focused on delivering secure, low-cost, and sustainable energy solutions through the development and operation of natural gas liquefaction and carbon capture and storage infrastructure. Through its subsidiaries, the company is developing and constructing the Rio Grande LNG natural gas liquefaction and export facility near Brownsville, Texas, with approximately 48 MTPA of potential liquefaction capacity currently under construction or in development.

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