NextDecade Corporation (NextDecade, the Company) (NASDAQ: NEXT)
is proud to announce it has made a positive final investment
decision (FID) to construct the first three liquefaction trains
(Phase 1) at the Company’s 27 million tonnes per annum (MTPA) Rio
Grande LNG (RGLNG) export facility in Brownsville, Texas.
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Today, the Company:
- Executed and closed a joint venture agreement for Phase 1 which
included approximately $5.9 billion of financial commitments from
Global Infrastructure Partners (GIP), GIC, Mubadala Investment
Company (Mubadala), (collectively, the Financial Investors), and
TotalEnergies (NYSE: TTE);
- Committed to invest approximately $283 million in Phase 1
including $125 million of pre-FID capital investments into Phase
1;
- Closed senior secured non-recourse bank credit facilities of
$11.6 billion, consisting of $11.1 billion in construction term
loans and a $500 million working capital facility; and
- Closed a $700 million senior secured non-recourse private
placement notes offering.
The $18.4 billion project financing for RGLNG Phase 1, is the
largest greenfield energy project financing in U.S. history and
underscores the critical role that LNG and natural gas will
continue to play in the global energy transition. Industry experts
expect a global shortfall of LNG before 2030, which if not
addressed by projects such as RGLNG, may result in a prolonged
reliance on other more carbon intensive fuels such as coal and
oil.
In conjunction with making a positive FID, RGLNG issued the
notice to proceed (NTP) to Bechtel Energy Inc. (Bechtel) to begin
construction of Phase 1 under its lump-sum turnkey engineering,
procurement, and construction contracts (EPC). The final EPC cost
at NTP is approximately $12.0 billion. The remaining expected
project costs to be covered by the financing that closed today are:
owner’s costs and contingencies of approximately $2.3 billion,
dredging for the Brazos Island Harbor Channel Improvement Project,
conservation of more than 4,000 acres of wetland and wildlife
habitat area and installation of utilities of approximately $600
million, and interest during construction and other financing costs
of approximately $3.1 billion.
Phase 1, with nameplate liquefaction capacity of 17.6 MTPA, has
16.2 MTPA of long-term binding LNG sale and purchase agreements
(SPAs) with TotalEnergies, Shell NA LNG LLC, ENN LNG Pte Ltd, Engie
S.A., ExxonMobil LNG Asia Pacific, Guangdong Energy Group, China
Gas Hongda Energy Trading Co., Galp Trading S.A. and Itochu
Corporation.
“Achieving FID and issuing NTP on RGLNG Phase 1 is a landmark
event reflecting years of hard work and dedication by NextDecade’s
employees, shareholders, construction partners, equipment
suppliers, and customers,” said Matt Schatzman, NextDecade’s
Chairman and Chief Executive Officer. “I want to specifically
recognize the Rio Grande Valley community, the Port of Brownsville
and the countless leaders and officials at the local, state, and
federal levels that have supported us throughout the development of
RGLNG Phase 1.”
“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 Bayo Ogunlesi, Chairman
and Chief Executive Officer of Global Infrastructure Partners. “Our
investment in RGLNG affirms GIP’s commitment to promoting
decarbonization, energy security and energy affordability.”
“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,” said
Patrick Pouyanné, Chairman and CEO of TotalEnergies. “This project
gives TotalEnergies access to competitive LNG thanks to its low
production costs. LNG from this first phase will boost
TotalEnergies U.S. LNG export capacity to over 15 MTPA by 2030, and
thus our ability to contribute to European gas security, and to
provide customers in Asia with an alternative form of energy that
is half as emissive as coal.”
“Today’s announcement marks a pivotal milestone in Mubadala’s
enduring partnership with NextDecade in the development of RGLNG,”
said Khaled Abdulla Al Qubaisi, Chief Executive Officer of
Mubadala’s Real Estate & Infrastructure Investments platform.
“Mubadala is delighted to welcome GIP, GIC and TotalEnergies into
the partnership as RGLNG enters its next phase of development.”
“NextDecade is on a mission to produce lower-carbon intensive
LNG for its customers, and we’re honored to be their partner,” said
Paul Marsden, President of Bechtel Energy. “Today, as we
commence engineering, procurement, and construction on the first
phase of this project, we reaffirm our commitment to the community
through quality jobs, training, and support for the supply chain
and small businesses.”
Under the joint venture agreement executed today, NextDecade
will hold equity interests that entitle the Company to receive up
to 20.8% of the cash flows generated by Phase 1 during operations.
Financial Investors and TTE will hold equity interests that entitle
them to a minimum of 62.5% and 16.7% of the cash flows generated by
Phase 1 during operations, respectively.
As part of the transaction, Financial Investors and TTE each
have options to invest in RGLNG Train 4 and Train 5 equity, and
options to invest in the planned carbon capture and sequestration
project at RGLNG. TTE’s right to invest in Train 4 and Train 5 is
conditioned on exercising their LNG purchase rights of 1.5 MTPA in
each of Train 4 and Train 5. The Company believes these options
with its partners will enable NextDecade to deliver the full
FERC-approved five-train RGLNG project over time.
"We look forward to delivering this important LNG project that
will supply the world with reliable, and lower-carbon intensive
LNG, while proudly supporting the Rio Grande Valley community by
investing billions of dollars and creating thousands of much needed
and well-deserved jobs,” said Schatzman. “Now our focus turns to
safely constructing Phase 1 on time and on budget and progressing
commercial negotiations on RGLNG Train 4 and Train 5 to further
expand our LNG platform and grow NextDecade shareholder value.”
Latham & Watkins LLP acted as lead outside counsel to
NextDecade on the project financing transactions. MUFG Bank, Ltd.
acted as financial advisor to NextDecade in connection with the
debt financing and Macquarie Capital (USA) Inc. acted as financial
advisor to NextDecade in connection with the equity financing.
Kirkland & Ellis LLP acted as legal counsel to GIP, Jones
Day acted as legal counsel to TotalEnergies, Sidley Austin LLP
acted as legal counsel to GIC, White & Case LLP acted as legal
counsel to Mubadala and Norton Rose Fulbright US LLP acted as legal
counsel to the lenders.
About NextDecade Corporation
NextDecade Corporation is an energy company accelerating the
path to a net-zero future. Leading innovation in more sustainable
LNG and carbon capture solutions, NextDecade is committed to
providing the world access to cleaner energy. Through our wholly
owned subsidiaries Rio Grande LNG and NEXT Carbon Solutions, we are
developing a 27 MTPA LNG export facility in South Texas along with
one of the largest planned carbon capture and storage projects in
North America. We are also working with third-party customers to
deploy our proprietary processes to lower the cost of carbon
capture and storage and reduce CO2 emissions at their
industrial-scale facilities. NextDecade’s common stock is listed on
the Nasdaq Stock Market under the symbol “NEXT.” NextDecade is
headquartered in Houston, Texas. For more information, please visit
www.next-decade.com.
About Global Infrastructure Partners (GIP)
Global Infrastructure Partners (GIP) is a leading infrastructure
investor that specializes in investing in, owning and operating the
largest and most complex assets across the energy, transport,
digital infrastructure and water and waste management sectors. We
are a leader in decarbonization and well positioned to support the
global energy transition. Headquartered in New York, GIP has
offices in Brisbane, Delhi, Hong Kong, London, Melbourne, Mumbai,
Singapore, Stamford and Sydney.
GIP has $100 billion in assets under management. Our portfolio
companies have combined annual revenues of approximately $80
billion and employ over 100,000 people. Our focus on real
infrastructure assets, combined with our deep proprietary
origination network and comprehensive operational expertise,
enables us to be responsible stewards of our investors' capital and
to create positive economic impact for communities. For more
information, visit www.global-infra.com.
About TotalEnergies
TotalEnergies is a global multi-energy company that produces and
markets energies: oil and biofuels, natural gas and green gases,
renewables and electricity. Our more than 100,000 employees are
committed to energy that is ever more affordable, cleaner, more
reliable and accessible to as many people as possible. Active in
nearly 130 countries, TotalEnergies puts sustainable development in
all its dimensions at the heart of its projects and operations to
contribute to the well-being of people.
About GIC
GIC is a leading global investment firm established in 1981 to
secure Singapore's financial future. As the manager of Singapore's
foreign reserves, GIC takes a long-term, disciplined approach to
investing, and is uniquely positioned across a wide range of asset
classes and active strategies globally. These include equities,
fixed income, real estate, private equity, venture capital, and
infrastructure. The firm's long- term approach, multi-asset
capabilities, and global connectivity enable them to be an investor
of choice. GIC seeks to add meaningful value to its investments.
Headquartered in Singapore, GIC has a global talent force of over
1,900 people in 11 key financial cities and has investments in over
40 countries. Further information is available at
https://www.gic.com.sg.
About Mubadala Investment Company
Mubadala Investment Company is a sovereign investor managing a
global portfolio, aimed at generating sustainable financial returns
for the Government of Abu Dhabi. Mubadala’s $276 billion (AED 1015
billion) portfolio spans six continents with interests in multiple
sectors and asset classes. We leverage our deep sectoral expertise
and long-standing partnerships to drive sustainable growth and
profit, while supporting the continued diversification and global
integration of the economy of the United Arab Emirates.
For more information about Mubadala Investment Company, please
visit: www.mubadala.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. The words
“anticipate,” “contemplate,” “estimate,” “expect,” “project,”
“plan,” “intend,” “believe,” “may,” “might,” “will,” “would,”
“could,” “should,” “can have,” “likely,” “continue,” “design,”
“assume,” “budget,” “guidance,” and “forecast” and other words and
terms of similar expressions are intended to identify
forward-looking statements, and these statements may relate to the
business of NextDecade and its subsidiaries. These statements have
been based on assumptions and analysis made by NextDecade in light
of current expectations, perceptions of historical trends, current
conditions and projections about future events and trends and
involve a number of known and unknown risks, which may cause actual
results to differ materially from expectations expressed or implied
in the forward-looking statements. These risks include NextDecade’s
progress in the development of its LNG liquefaction and export
projects and CCS projects and the timing of that progress; reliance
on third-party contractors to successfully complete the Rio Grande
LNG terminal (the “Terminal”), the pipeline to supply gas to the
Terminal and any CCS projects; ability to comply with the terms of
debt and commercial agreements related to the Terminal; ability to
develop NEXT Carbon Solutions’ business though implementation of
CCS projects; ability to secure additional debt and equity
financing in the future on commercially acceptable terms; accuracy
of estimated costs for the Terminal and CCS projects; ability to
achieve operational characteristics of the Terminal and CCS
projects, when completed, including liquefaction capacities and
amount of CO2 captured and stored, and any differences in such
operational characteristics from expectations; development risks,
operational hazards and regulatory approvals applicable to
NextDecade’s development, construction and operation activities and
those of its third-party contractors and counterparties;
technological innovation which may lessen NextDecade’s anticipated
competitive advantage or demand for its offerings; global demand
for and price of LNG; availability of LNG vessels worldwide;
changes in legislation and regulations relating to the LNG and CCS
industries, including environmental laws and regulations that
impose significant compliance costs and liabilities; scope of
implementation of carbon pricing regimes aimed at reducing
greenhouse gas emissions; global development and maturation of
emissions reduction credit markets; adverse changes to existing or
proposed carbon tax incentive regimes; global pandemics, including
the 2019 novel coronavirus pandemic, the Russia-Ukraine conflict,
other sources of volatility in the energy markets and their impact
on NextDecade’s business and operating results, including any
disruptions in its operations or development of the Terminal and
the health and safety of its employees, and on its customers, the
global economy and the demand for LNG; risks related to doing
business in and having counterparties in foreign countries;
NextDecade’s ability to maintain the listing of our securities on
the Nasdaq Capital Market or another securities exchange or
quotation medium; changes adversely affecting the businesses in
which NextDecade is engaged; management of growth; general economic
conditions; ability to generate cash; and the result of future
financing efforts and applications for customary tax incentives;
and other matters discussed in the “Risk Factors” section of
NextDecade’s most recent Annual Report on Form 10-K and subsequent
reports filed with the Securities and Exchange Commission. The
forward-looking statements in this press release speak as of the
date of this release. Although NextDecade believes that the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that the expectations will
prove to be correct. NextDecade may from time to time voluntarily
update its prior forward-looking statements, however, it disclaims
any commitment to do so except as required by securities laws.
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NextDecade Corporation IR@next-decade.com
communications@next-decade.com Global Infrastructure Partners
(GIP) Communications: Mustafa Riffat │
mustafa.riffat@global-infra.com TotalEnergies Media
Relations : +33 (0)1 47 44 46 99 │ presse@totalenergies.com │
@TotalEnergiesPR Investor Relations : +33 (0)1 47 44 46 46 │
ir@totalenergies.com GIC Katy Conrad, Senior Vice President,
Communications & Corporate Affairs: (212) 856-2407
katyconrad@gic.com.sg Mubadala Investment Company Media
inquiries: mubadalareii@edelman.com
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