November 10, 2022 [Reuters] – NextDecade, the developer of the 27 mtpa Rio Grande LNG export plant in Texas, has launched an $85 million private placement as it looks to take a final investment decision on the project’s first three liquefaction trains.
The Houston-based firm said in a statement it would sell $85 million of common stock at $5.50 per share to 10 institutional investors.
NextDecade expects the private placement to close on September 19, 2022, subject to the satisfaction of customary closing conditions.
It plans to use the proceeds from the private placement to “continue development activity in preparation for its anticipated positive final investment decision on the first three trains at its Rio Grande LNG project.”
NextDecade previously said it anticipates making a positive FID on up to three trains of the Rio Grande LNG export project in the second half of 2022, with FIDs of its remaining trains to follow thereafter.
The firm signed several LNG supply deals this year, including the most recent deal with ExxonMobil.
NextDecade said the LNG will come from the first two liquefaction trains at Rio Grande, with the first train expected to start commercial operations as early as 2026.
Rio Grande is one of several North American LNG export projects that delayed decisions to start construction in recent years in part because coronavirus demand destruction made customers unwilling to sign long-term deals needed to finance the multibillion-dollar facilities.
But all that changed after Russia’s invasion of Ukraine on Feb. 24, prompting several countries in Europe and around the world to seek alternative gas suppliers to break their dependence on fuel from Russia.
There are currently eight companies hoping to make final investment decisions (FIDs) in 2022 to build their plants in the United States, Canada and Mexico. Many of those projects, like Rio Grande, have been delayed for years.
Based on current expected demand for LNG and assuming further LNG contracting and financing, NextDecade said it anticipates making a positive FID on up to three trains at Rio Grande in the second half of 2022, with FIDs of its remaining trains to follow thereafter.
The Rio Grande project is designed to produce about 27 MTPA of LNG through five roughly 5.4-MTPA trains.
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