TotalEnergies and its partners have made the final investment decision (FID) to develop the first phase of the South Texas-based natural gas liquefaction (LNG) project, Rio Grande LNG.
The French oil and gas major is partnering with Global Infrastructure Partners, NextDecade, GIC and Mubadala on the project.
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Phase one consists of three liquefaction trains with a combined annual capacity of 17.5 million tonnes (mtpa) and capital expenditures of $14.8bn (€13.2bn).
Bechtel has been given the engineering, procurement and construction contract, and commissioning of the plant is planned for 2027.
The project will be funded by the partners’ equity contributions as well as a loan commitment that was finalised this week with a group of multinational banks.
TotalEnergies chairman and CEO Patrick Pouyanné said: “This project gives TotalEnergies access to competitive LNG thanks to its low production costs.
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By GlobalData“LNG from this first phase will boost TotalEnergies US LNG export capacity to over 15mtpa 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.”
Following the FID and in accordance with the conditions of the contract signed last month, TotalEnergies acquires a 16.67% ownership in the joint venture in charge of this first phase and will take part in the equity contributions, for a total amount of $1.1bn.
In addition, the French company will purchase 5.4mtpa of LNG from this phase’s production each year for 20 years, and will own a total of 17.5% of NextDecade.
NextDecade chairman and CEO Matt Schatzman said: “Working together with TotalEnergies, we will be able to fulfil our mission to deliver lower carbon-intensive LNG to customers around the globe and we look forward to working together as construction on phase one of Rio Grande LNG begins.”
