In A $219 Million Deal, TotalEnergies Acquires 17.5% Of NextDecade

(CTN News) – 17.5% of TotalEnergies has been acquired by NextDecade, the US-based LNG developer that is developing a liquefied natural gas (LNG) plant in South Texas called Rio Grande LNG (RGLNG).

Across three phases of the LNG plant, TotalEnergies will pay $219 million (€201.97 million) for the deal.

It has been announced that NextDecade has entered into framework agreements with TotalEnergies and Global Infrastructure Partners, with the option to invest in RGLNG and its carbon capture and sequestration (CCS) project.

In order to accelerate the development of these major industrial projects, TotalEnergies will leverage its extensive experience in LNG and technical expertise, said Patrick Pouyanné, chairman and CEO of TotalEnergies.

Our involvement in this project will allow us to add 5.4 million tons of LNG to our global portfolio, strengthening our ability to ensure Europe’s security of gas supply, as well as provide our Asian customers with an alternative fuel to coal that emits half the amount of CO2 emissions than coal.”

As part of the agreement, TotalEnergies has also committed to purchase LNG from phase 1 for the next 20 years on a free-on-board basis, which is equivalent to 5.4 million tonnes every year.

In total, the liquefaction plant consists of three liquefaction trains with a capacity of 17.5 million tons of liquefaction per year.

It was announced on 13 June that TotalEnergies had received the first tranche of the purchase, a 5.06% stake, for $40m and $4.9837 per share.

It is expected that NextDecade will sell the second tranche for $110m, and the third tranche will amount to a combined stock purchase of 17.5% of NextDecade’s outstanding common stock after the initial public offering has been closed.

According to current estimates, NextDecade is estimating that it will sell around 45.1 million shares of its common stock to TotalEnergies at an average price per share of $4.86, based on the current market price of the stock.

“The completion of this project represents a critical step forward in the process of displacing coal use and upholds GIP’s commitment to the promotion of decarbonisation, energy security, and affordability of energy.

We believe that our shared vision with TotalEnergies and NextDecade, along with our capabilities, will undoubtedly help catalyse the development of cleaner energy,” said Bayo Ogunlesi, chairman and CEO of Global Infrastructure Partners.

As of right now, the US Federal Energy Regulatory Commission has already given the Rio Grande project its approval.

A further phase of CCS operations will be conducted by TotalEnergies as part of its efforts to reduce emissions generated by the LNG project by CCS.

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