NextDecade Corporation (NextDecade or the Company) (NASDAQ:
NEXT) today provided an update on developmental and strategic
activities for the first quarter 2024 and early second quarter
2024.
CEO Commentary
“Construction of Phase 1 at the Rio Grande LNG Facility
continues to progress according to plan, as we work alongside
Bechtel to construct Trains 1 through 3 and their supporting
infrastructure safely, efficiently, on schedule, and within
budget,” said Matt Schatzman, NextDecade’s Chairman and Chief
Executive Officer. “The Rio Grande LNG Facility has truly begun to
take shape recently, as concrete foundation pours for Train 1 are
ongoing, key materials such as piping and structural steel have
been delivered to the site, and shoreline work and levee
construction are underway. Proactive project and risk management
remain key priorities as construction of Phase 1 continues to
progress.”
“We are currently at a unique point in the Company’s history as
we develop and expect to FID highly attractive expansion capacity
this year and next year, while safely constructing Phase 1
capacity, and preparing our organization to achieve our long-term
objective of becoming a leading LNG owner and operator. We are
confident that delivering on our plans will create long-term value
for our stakeholders.”
“We are focused on achieving a positive FID on Train 4 in the
second half of this year. We expect TotalEnergies to exercise its
option to purchase 1.5 million tonnes per annum of LNG from Train
4, and commercial discussions are progressing well with numerous
additional counterparties for the remainder of the LNG necessary to
support a positive FID on Train 4 this year. Additionally, we are
continuing to work with Bechtel on the EPC contracting process,
which we expect will enable us to finalize the EPC contract for
Train 4 by the end of the second quarter of 2024. We are determined
to capitalize on the robust market opportunity to unlock the value
of our fully permitted, brownfield expansion capacity, and we are
strongly committed to do so in a way that maximizes value to our
shareholders.”
Significant Recent Developments
Construction
Under the EPC contracts with Bechtel Energy Inc. (Bechtel),
Phase 1 progress is tracked for Train 1, Train 2, and the common
facilities on a combined basis and Train 3 on a separate basis. As
of March 2024:
- The overall project completion percentage for Trains 1 and 2
and the common facilities of the Rio Grande LNG Facility was 18.2%,
which is in line with the schedule under the EPC contract. Within
this project completion percentage, engineering was 54.9% complete,
procurement was 34.4% complete, and construction was 1.9%
complete.
- The overall project completion percentage for Train 3 of the
Rio Grande LNG Facility was 6.9%, based on preliminary schedules,
which is also in line with the schedule under the EPC contract.
Within this project completion percentage, engineering was 5.2%
complete, procurement was 16.7% complete, and construction was 0.0%
complete.
Financial
- In January 2024, the Company's wholly-owned subsidiary
NextDecade LNG, LLC entered into a credit agreement that provides
for a $50 million senior secured revolving credit facility with
additional capacity of $12.5 million to cover interest. Borrowings
under the revolving credit facility may be used for general
corporate purposes, including development costs related to Train 4
at the Rio Grande LNG Facility. Borrowings bear interest at SOFR or
the base rate plus an applicable margin as defined in the credit
agreement. The revolving credit facility and interest term loan
mature at the earlier of two years from the closing date or 10
business days after a positive FID of Train 4.
- In February 2024, Rio Grande LNG, LLC (Rio Grande) issued and
sold $190 million of senior secured notes in a private placement
transaction to finance a portion of Phase 1. The senior secured
notes were issued on February 9, 2024 and resulted in a reduction
in the commitments outstanding under Rio Grande's existing bank
credit facilities for Phase 1. These senior secured notes will be
amortized over a period of approximately 18 years beginning in
mid-2029, with a final maturity in June 2047. The senior secured
notes bear interest at a fixed rate of 6.85% and rank pari passu to
Rio Grande's existing senior secured financings.
Rio Grande LNG Facility
NextDecade is constructing and developing the Rio Grande LNG
Facility on the north shore of the Brownsville Ship Channel in
south Texas. The site is located on 984 acres of land which has
been leased long-term and includes 15,000 feet of frontage on the
Brownsville Ship Channel. The Rio Grande LNG Facility has received
necessary approvals and authorizations required for construction,
including those from the Federal Energy Regulatory Commission
(FERC) and the Department of Energy (DOE), which allow for
development, construction, and operation of up to five trains and
27 MTPA of LNG exports.
Phase 1 (Trains 1-3)
Phase 1 at the Rio Grande LNG Facility is under construction.
Phase 1 includes three liquefaction trains with a total nameplate
capacity of 17.61 MTPA of LNG production, 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. Phase 1 also includes associated site infrastructure
and common facilities including feed gas pretreatment facilities,
electric and water utilities, two totally enclosed ground flares
for the LNG tanks and marine facilities, two ground flares for the
liquefaction trains, roads, levees surrounding the entire site, and
warehouses, administrative, operations control room, and
maintenance buildings.
As of March 2024, progress on Trains 1 through 3 is in line with
the schedule under the EPC Contracts. The civil works program has
continued to progress via the deep soil mixing program, as Train 1
deep soil mixing is approaching completion and rigs are preparing
to move to Train 2 for production and Train 3 for testing. Concrete
foundation pours for Train 1 are underway. Delivery of key
materials to site has begun, including large bore above-ground pipe
and structural steel. Additionally, LNG tank piling has progressed
significantly, berth 1 piling work commenced, and levee
construction continues.
Bechtel has made meaningful progress on procurement for Phase 1,
with a focus on completing purchase orders for critical and
high-value items early in the construction process. As of March
2024, Bechtel has issued approximately 90% of the total purchase
orders for Trains 1 and 2 based on dollar value and approximately
84% of the total purchase orders for Train 3 based on dollar
value.
NextDecade holds equity interests in the Phase 1 joint venture
that entitle it to receive up to 20.8% of the distributions of
available cash during operations.
Final Investment Decision on Train 4 and Train 5
NextDecade is targeting a positive FID and the issuance of a
full notice to proceed (NTP) to Bechtel for Train 4 and its related
infrastructure at the Rio Grande LNG Facility in the second half of
2024. Achieving a positive FID on Trains 4 and 5, the fully
permitted expansion capacity at the Rio Grande LNG Facility will be
subject to, among other things, finalizing and entering into EPC
contracts, entering into appropriate commercial arrangements, and
obtaining adequate financing to construct each train and related
infrastructure.
The Company has undertaken certain pre-FID activities for Train
4, including the FEED and EPC contract processes with Bechtel,
which the Company expects will enable the finalization of the EPC
contract for Train 4 by the end of the second quarter of 2024.
The Company continues to advance commercial discussions with
multiple potential counterparties and expects to finalize
commercial arrangements for Train 4 in the coming months to support
an FID on Train 4 in the second half of 2024.
The Company expects to finance construction of Train 4 utilizing
a combination of debt and equity funding. The Company expects to
enter into bank facilities for the debt portion of the funding. In
connection with consummating the Rio Grande Phase 1 equity joint
venture, the Company's equity partners each have options to invest
in Train 4 equity, which, if exercised, would provide approximately
60% of the equity funding required for Train 4. Inclusive of these
options, NextDecade currently expects to fund 40% of the equity
commitments for Train 4 and to have an initial economic interest of
40% in Train 4, increasing to 60% after its equity partners achieve
certain returns on their investments in Train 4. The Company
expects to complete the financing process for Train 4 after the EPC
contract and commercial arrangements are finalized.
The Company expects to begin the EPC contracting process for
Train 5 after a positive FID on Train 4. TotalEnergies also holds
an LNG purchase option for 1.5 MTPA for Train 5, and the Rio Grande
Phase 1 equity partners have options to invest in Train 5 equity
which are materially equivalent to their options to participate in
Train 4 equity.
Investor Presentation
NextDecade has posted an updated investor presentation to its
website concurrently with this release. A copy of this release and
the investor presentation can be found on its website at
www.next-decade.com.
About NextDecade Corporation
NextDecade Corporation is an energy company accelerating the
path to a net-zero future. Leading innovation in more sustainable
LNG and carbon capture solutions, NextDecade is committed to
providing the world access to cleaner energy. Through our
subsidiaries Rio Grande LNG and NEXT Carbon Solutions, we are
developing a 27 MTPA LNG export facility in South Texas along with
one of the largest carbon capture and storage projects in North
America. We are also working with third-party customers around the
world to deploy our proprietary processes to lower the cost of
carbon capture and storage and reduce CO2 emissions at their
industrial-scale facilities. NextDecade’s common stock is listed on
the Nasdaq Stock Market under the symbol “NEXT.” NextDecade is
headquartered in Houston, Texas. For more information, please visit
www.next-decade.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. The words
“anticipate,” “contemplate,” “estimate,” “expect,” “project,”
“plan,” “intend,” “believe,” “may,” “might,” “will,” “would,”
“could,” “should,” “can have,” “likely,” “continue,” “design,”
“assume,” “budget,” “guidance,” “forecast,” and "target," and other
words and terms of similar expressions are intended to identify
forward-looking statements, and these statements may relate to the
business of NextDecade and its subsidiaries. These statements have
been based on assumptions and analysis made by NextDecade in light
of current expectations, perceptions of historical trends, current
conditions and projections about future events and trends and
involve a number of known and unknown risks, which may cause actual
results to differ materially from expectations expressed or implied
in the forward-looking statements. Although NextDecade believes
that the expectations reflected in these forward-looking statements
are reasonable, it can give no assurance that the expectations will
prove to be correct. NextDecade’s actual results could differ
materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those
discussed in NextDecade’s periodic reports that are filed with and
available from the Securities and Exchange Commission.
Additionally, any development of subsequent trains at the Rio
Grande LNG Facility or CCS projects remains contingent upon
execution of definitive commercial and financing agreements,
securing all financing commitments and potential tax incentives,
achieving other customary conditions and making a final investment
decision to proceed. The forward-looking statements in this press
release speak as of the date of this release. NextDecade may from
time to time voluntarily update its prior forward-looking
statements, however, it disclaims any commitment to do so except as
required by securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20240509995231/en/
Investors Megan Light mlight@next-decade.com
832-981-6583
Media Susan Richardson srichardson@next-decade.com
832-413-6400
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