TotalEnergies, along with its partners, has reached the final investment decision (FID) to proceed with the development of the first phase of Rio Grande LNG (RGLNG), a liquefied natural gas (LNG) project located in South Texas, USA.

The initial phase of the project will consist of three liquefaction trains with a combined capacity of 17.5 million tonnes per year (tpy) and an estimated capital expenditure (CAPEX) of $14.8 billion. The engineering, procurement, and construction (EPC) contract has been awarded to Bechtel, and the commissioning of the plant is scheduled for 2027. The project will be funded through equity contributions from the partners and a debt contribution secured with an international consortium of banks.

As part of the agreement signed in June 2023, TotalEnergies will acquire a 16.67% stake in the joint venture responsible for the first phase of the project and participate in its equity contributions, amounting to $1.1 billion. Additionally, TotalEnergies will hold a total stake of 17.5% in NextDecade, with an investment of $219 million. The acquisition of the remaining tranches of NextDecade's stake will be completed in the coming days, increasing TotalEnergies' ownership to 12.47%, and a third tranche of 5.03% will be acquired by the end of the year. Under the agreement, TotalEnergies will also off-take 5.4 million tpy of LNG from the project's production for a period of 20 years.

Patrick Pouyanné, Chairman and CEO of TotalEnergies, highlighted that the project will provide TotalEnergies with access to cost-competitive LNG. The LNG produced in this first phase will increase TotalEnergies' US LNG export capacity to over 15 million tpy by 2030, contributing to European gas security and offering customers in Asia a lower-emission alternative to coal.

Matt Schatzman, Chairman and CEO of NextDecade, expressed his satisfaction with TotalEnergies' partnership in the RGLNG project, emphasizing their joint commitment to delivering LNG with reduced carbon intensity to global customers. The construction of Phase 1 of RGLNG is set to commence soon.