Offshore Technology

TotalEnergies acquires 17.5% stake in NextDecade for $219m

TotalEnergies has signed a framework agreement with GIP and NextDecade to invest in Rio Grande’s LNG plant and its carbon capture and sequestration project.

TotalEnergies has acquired a 17.5% stake in US-based liquified natural gas (LNG) developer NextDecade's Rio Grande LNG (RGLNG) plant in South Texas. TotalEnergies will pay $219m (€201.97m) for the deal across three phases of the LNG plant.

NextDecade has entered into framework agreements with TotalEnergies and Global Infrastructure Partners, with options to invest in RGLNG and its carbon capture and sequestration (CCS) project.

“TotalEnergies will leverage its extensive experience in LNG and technical expertise in major industrial project development," said Patrick Pouyanné, chairman and CEO of TotalEnergies. "Our involvement in this project will add 5.4 million tons per year 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 CO₂ emissions."

Additionally, TotalEnergies has purchased LNG from phase 1 for 20 years on a free-on-board basis, worth 5.4 million tonnes per annum. It consists of three liquefaction trains with a total annual capacity of 17.5 million tons.

TotalEnergies purchased the first tranche on 13 June, a 5.06% stake for $40m and $4.9837 per share. NextDecade will sell the second tranche for $110m, and the third tranche will amount to the combined stock purchases equal to 17.5% of the outstanding common stock of NextDecade after closing.

Based on current estimates, NextDecade expects to sell around 45.1 million shares of common stock to TotalEnergies at an average price per share of approximately $4.86.

“This venture marks a critical step in displacing coal usage and upholds GIP’s commitment to promoting decarbonisation, energy security and energy affordability. Our shared vision with TotalEnergies and NextDecade, combined with our capabilities, will undoubtedly help catalyse the development of cleaner energy,” said Bayo Ogunlesi, chairman and CEO of Global Infrastructure Partners.

The Rio Grande project has already received authorisations from the US Federal Energy Regulatory Commission. TotalEnergies will participate in further phases of CCS operations to reduce emissions generated by the LNG project.