$175M loan secured for NextDecade’s mega LNG project in Texas

Rio Grande LNG Super Holdings, a wholly-owned subsidiary of Houston-headquartered energy player NextDecade Corporation, has entered into a credit agreement with General Atlantic Credit’s Atlantic Park Fund. Part of the loan will be put towards financing two trains at the liquefied natural gas (LNG) export terminal under construction at the Port of Brownsville, Texas.

The U.S. player intends to use proceeds to repay outstanding borrowings under the existing $50 million revolving credit facility and $12.5 million interest-term loan made a year ago with MUFG Bank.

Furthermore, the funds will also be used for working capital and general corporate purposes, including development expenses for the expansion of trains 4 and 5 at the Rio Grande LNG facility. In November 2024, the company said it expects to finance the construction of Train 4 through a combination of debt and equity funding.

NextDecade is developing the 27 million tonnes per annum (mtpa) Rio Grande LNG export facility in South Texas along with what it says is one of the largest proposed carbon capture and storage (CCS) projects in North America. 

In August 2024, the firm disclosed that its subsidiary withdrew its application to the Federal Energy Regulatory Commission (FERC) for the proposed CCS project at the Rio Grande LNG facility. NextDecade’s CEO explained the decision by saying that the “CCS project at RGLNG is not sufficiently developed to allow FERC review to continue at this time.”

The final investment decision (FID) for Phase 1 of the project, encompassing the construction of three trains with a nameplate liquefaction capacity of 17.6 mtpa, two 180,000 cubic meter full containment LNG storage tanks, and two jetty berthing structures designed to load LNG carriers up to 216,000 cubic meters in capacity, was reached in July 2023. The construction work kicked off three months later.

While the work on Phase 1 is said to be progressing according to schedule, legal challenges have prevented the U.S. player from reaching an FID on Train 4, which was initially planned for the second half of 2024. Following a positive FID for Train 4, the company expects to start the engineering, procurement, and construction (EPC) contracting process for Train 5. 

NextDecade confirmed a multibillion-dollar EPC contract with Bechtel for Train 4 and related infrastructure in August 2024. Before that, the U.S. player signed offtake agreements for Train 4 with Aramco and ADNOC.