NextDecade enters pact with TotalEnergies, GIP to support Rio Grande LNG project

NextDecade (NEXT) announced that it has entered into framework agreements with Global Infrastructure Partners, or GIP, and TotalEnergies (TTE) to enable the final investment decision, or FID, for the Rio Grande LNG project Trains 1, 2 and 3 and to provide momentum for the further development of RGLNG Train 4 and Train 5. NextDecade, GIP and TotalEnergies have entered into framework agreements whereby GIP would become a majority investor in Phase 1, and TotalEnergies would become a 16.67% investor, both subject to execution of definitive documentation and FID. The agreements are expected to further provide GIP and TotalEnergies options to invest in RGLNG Train 4 and Train 5 and options to invest in the planned carbon capture and sequestration, or CCS, project at RGLNG. In addition, TotalEnergies has agreed to purchase 5.4M tons per annum of LNG from Phase 1 for 20 years on a free on board basis indexed to Henry Hub and has options to purchase LNG from Train 4 and Train 5. TotalEnergies has also agreed to acquire in three tranches a 17.5% common stock position in NextDecade for an aggregate purchase price of $219.4M. The first tranche of $40M of NextDecade common stock was issued and sold today at $4.9837 per share. The second tranche of $110M will be issued and sold at the same price after FID on Phase 1. The third tranche will be issued and sold in an amount such that the combined stock purchases equal 17.5% of the outstanding common stock of NextDecade after the closing of the third tranche. The issuance and sale of the common stock in the third tranche will be conditioned on the approval of NextDecade shareholders. Based on current estimates, NextDecade expects to sell approximately 45.1M shares of common stock in the aggregate to TotalEnergies at an average price per share of approximately $4.86.