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$6.7 billion addition to $18.4B US LNG project approved and ready to roll

AnyFans 2025-09-12

By Melisa Cavcic

With the green light for a final investment decision (FID) on the fourth train now out of the way, Houston-headquartered NextDecade Corporation is moving full speed ahead with the expansion of the first phase of its liquefied natural gas (LNG) export project in Texas, United States. Another multibillion-dollar addition is expected to get the go-ahead by the end of the year.

After confirming its expectation to achieve a positive FID on Rio Grande LNG Train 4 by September 15, 2025, NextDecade has sanctioned this addition to the U.S. project under development near Brownsville, closed financial transactions to fully fund it, and issued full notice to proceed to Bechtel Energy under the lump-sum, turnkey engineering, procurement, and construction (EPC) contract for Train 4 and related infrastructure.

Train 4, which has expected LNG production capacity of approximately 6 million tonnes per annum (mtpa), bringing the total expected LNG production capacity under construction at Rio Grande LNG to approximately 24 mtpa, is commercially supported by 4.6 mtpa of 20-year LNG sale and purchase agreements (SPAs) with ADNOC, TotalEnergies, and Aramco.

The guaranteed substantial completion date for Train 4, as well as the date of first commercial delivery (DFCD) under the Train 4 LNG SPAs, is anticipated in the second half of 2030. The project costs for this train and related infrastructure are expected to total approximately $6.7 billion, including EPC costs, owner’s costs, contingencies, financing fees and interest during construction, and other costs.

The developer has closed on approximately $6.7 billion in committed financing to fully fund the expected costs for Train 4 and related infrastructure, including $3.85 billion term loan facility at Rio Grande LNG Train 4, $1.13 billion in equity commitments from NextDecade, and $1.70 billion in equity commitments from Global Infrastructure Partners, a part of BlackRock; GIC; Mubadala Investment Company; and TotalEnergies.

Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies, commented: “We are very pleased with the FID of RGLNG Train 4. This project from which we will offtake 1.5 Mtpa strengthens our LNG export capacity from the United States. It gives TotalEnergies access to competitive LNG thanks to its low production costs.

“The LNG from this fourth train will increase TotalEnergies’ U.S. LNG export capacity to over 16 Mtpa by 2030, further enhancing our ability to contribute to gas supply and building on our 10% market share worldwide.”

NextDecade, which received $98 million at financial close from Rio Grande LNG Train 4 for development costs and management services and expects an additional $50 million on September 9, 2026, has an initial economic interest of 40% in Train 4, which will increase to 60% after the financial investors achieve certain returns on their investments.

This comes two years after the FID for $18.4 billion Phase 1 of the Rio Grande LNG project was made in July 2023, when Bechtel won its second go-ahead in three months to proceed with the full construction of the project, after which the construction officially began in October 2023.

Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, noted: “We are pleased to have TotalEnergies, our largest LNG customer and equity partner for Phase 1 of Rio Grande LNG, extend their commitment to our project through Train 4. LNG exported by TotalEnergies from our project will provide affordable, reliable, and secure energy to customers around the world.”

TotalEnergies currently holds a 16.7% interest in Phase 1 of Rio Grande LNG, which includes three liquefaction trains under construction in South Texas, and will offtake 5.4 mtpa. This phase is expected to start operations in 2027. However, the French energy giant also holds a 17.1% stake in NextDecade, Rio Grande LNG’s shareholder and operator, which continues to progress Train 5 at Rio Grande LNG toward an expected FID in the fourth quarter of 2025.

Schatzman added: “The global call for additional natural gas infrastructure continues to be strong, and we are well positioned to meet this growing demand for cleaner energy, with approximately 24 million tonnes per annum (mtpa) of expected LNG production capacity currently under construction, Train 5 nearing a positive FID, and significant additional expansion capacity under development at the Rio Grande LNG site.”

As Train 5 commercialization is complete, this train is commercially supported by a total of 4.5 mtpa of 20-year LNG SPAs with JERA, EQT Corporation, and ConocoPhillips. NextDecade entered in June 2025 into a lump-sum, turnkey EPC contract with Bechtel for Train 5 and related infrastructure and extended the pricing validity period in September 2025 through November 15, 2025, to accommodate the current expected timeline for achieving a positive FID.

The project costs for Train 5 and related infrastructure are expected to total approximately $6.7 billion, including EPC costs, owner’s costs, contingencies, financing fees and interest during construction, and other costs, based on current estimates and expected interest rates. As a result, the firm expects to finance construction of this train using approximately 60% debt and 40% equity funding at the project level.

NextDecade is developing and constructing the Rio Grande LNG natural gas liquefaction and export facility through its subsidiaries, with around 48 mtpa of potential liquefaction capacity currently under construction or in development.

The U.S. player is also developing a potential carbon capture and storage (CCS) project at the facility that is expected to capture and permanently store over 5 million metric tons of CO2 per annum.