NextDecade supplies 4Q23 enterprise replace

“We’re dedicated to maximising long-term worth for NextDecade’s shareholders by executing our enterprise technique effectively and successfully,” mentioned Matt Schatzman, NextDecade’s Chairman and CEO. “We’re targeted on setting up Part 1 on the Rio Grande LNG Facility safely, on time, and on funds, and delivering a optimistic FID of our totally permitted enlargement capability to fulfill rising world demand for cleaner vitality sources together with LNG.”

“We now have a steadfast dedication to upholding the best requirements of security and excellence in mission administration and are working alongside our EPC accomplice, Bechtel, and different counterparties to make sure that development actions proceed easily and according to contractual schedules. Via rigorous planning, diligent execution, and proactive threat administration, collectively we’re in search of to maximise the effectivity of development efforts.”

“We’re additionally actively working to capitalize on market alternatives and place the corporate for sustained development by means of enlargement of our operational footprint. With regulatory approvals in place, our Prepare 4 and 5 enlargement capability is well-positioned to fulfill rising world demand for LNG. Supportive market circumstances present tailwinds to proceed progressing towards FID of Prepare 4, which is properly underway. Industrial discussions with numerous potential counterparties and the FEED and EPC contracting processes are continuing properly. Our progress stays aligned with our objective of reaching a optimistic last funding resolution for Prepare 4 within the second half of this yr.”

“Via disciplined execution on Part 1 and our enlargement capability on the Rio Grande LNG Facility, we’re poised to realize our long-term goal of changing into a number one supplier of LNG to clients across the globe whereas additionally delivering sustainable development and worth creation for our shareholders.”

Vital current developments

Improvement and development

Beneath the EPC contracts with Bechtel Vitality Inc., Part 1 progress is tracked for Prepare 1, Prepare 2, and the widespread services on a mixed foundation and Prepare 3 on a separate foundation. As of January 2024:

• The general mission completion proportion for Trains 1 and a pair of and the widespread services of the Rio Grande LNG Facility was 14.3%, which is according to the schedule beneath the EPC contract. Inside this mission completion proportion, engineering was 47.9% full, procurement was 26.8% full, and development was 1% full.
• The general mission completion proportion for Prepare 3 of the Rio Grande LNG Facility was 4.4%, based mostly on preliminary schedules, which can be according to the schedule beneath the EPC contract. Inside this mission completion proportion, engineering was 3.4% full, procurement was 10.6% full, and development was 0% full.

Strategic and Industrial

The corporate has began the FEED and EPC contract processes with Bechtel for Prepare 4 and are progressing quite a few discussions with potential patrons of LNG to supply industrial assist for Prepare 4. The EPC contracting course of and industrial discussions are progressing at a tempo according to the corporate’s goal of reaching a optimistic last funding resolution (FID) of Prepare 4 in 2H24.

Monetary

As of December 2023, Rio Grande’s excellent fixed-rate debt and executed rate of interest swaps have diminished its publicity to actions in rates of interest for about 84% of the debt presently projected to be incurred in assist of Part 1 development.

In December 2023, Rio Grande LNG, LLC entered right into a credit score settlement with a gaggle of lenders for $251 million of senior secured loans to finance a portion of Part 1. The senior secured loans had been disbursed in a single advance of US$251 million on 28 December 2023, which resulted in a discount within the commitments excellent beneath Rio Grande’s present financial institution credit score services for Part 1. These senior secured loans can be amortised over a interval of roughly 18 years starting in mid-2029, with a last maturity in September 2047. These senior secured loans bear curiosity at a set fee of seven.11% and rank pari passu to Rio Grande’s present senior secured financings.

In January 2024, the corporate’s wholly-owned subsidiary NextDecade LNG, LLC entered right into a credit score settlement that gives for a US$50 million senior secured revolving credit score facility with extra capability of US$12.5 million to cowl curiosity. Borrowings beneath the revolving credit score facility could also be used for normal company functions, together with growth prices associated to Prepare 4 on the Rio Grande LNG Facility. Borrowings will bear curiosity at SOFR or the bottom fee plus an relevant margin as outlined within the credit score settlement. The revolving credit score facility and curiosity time period mortgage mature on the earlier of two years from the time limit or 10 enterprise days after a optimistic FID on Prepare 4.

In February 2024, Rio Grande issued and bought US$190 million of senior secured notes in a non-public placement transaction to finance a portion of Part 1. The senior secured notes had been issued on 9 February 2024 and resulted in a discount within the commitments excellent beneath Rio Grande’s present financial institution credit score services for Part 1. These senior secured notes can be amortised over a interval of roughly 18 years starting in mid-2029, with a last maturity in June 2047. The senior secured notes bear curiosity at a set fee of 6.85% and rank pari passu to Rio Grande’s present senior secured financings.
Rio Grande has syndicated a portion of its financial institution credit score facility commitments, leading to a supporting lender group of roughly 40 worldwide banks.

Rio Grande LNG Facility

NextDecade is setting up and growing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel in south Texas by means of its partially-owned subsidiary Rio Grande. The positioning is positioned on 984 acres of land which has been leased long-term and consists of 15 000 ft of frontage on the Brownsville Ship Channel. The Rio Grande LNG Facility has obtained crucial approvals and authorisations required for development, together with these from the Federal Vitality Regulatory Fee (FERC) and the Division of Vitality (DOE), which permit for growth, development, and operation of as much as 5 trains and 27 million tpy of LNG exports.

Part 1 (Trains 1 – 3)

Part 1 on the Rio Grande LNG Facility is beneath development. Part 1 consists of three liquefaction trains with a complete nameplate capability of 17.61 million tpy of LNG manufacturing, two 180 000 m³ full containment LNG storage tanks, and two jetty berthing buildings designed to load LNG carriers as much as 216 000 m³ in capability. Part 1 additionally consists of related website infrastructure and customary services together with feed fuel pretreatment services, electrical and water utilities, two completely enclosed floor flares for the LNG tanks and marine services, two floor flares for the liquefaction trains, roads, levees surrounding the complete website, and warehouses, administrative, operations management room, and upkeep buildings.

As of January 2024, progress on Trains 1 – 3 is according to the schedule beneath the EPC Contracts. Latest development actions have included the beginning of Prepare 1 basis concrete pours, piling exercise for the LNG tanks, and development of the levee and marine offloading facility. Moreover, the civil works program has progressed through the deep soil mixing programme, and significant progress has been made on the shoreline restoration program, with the vast majority of shoreline reclamation nearing completion, and shoreline safety work has commenced. Bechtel has additionally made significant progress on buy orders for Prepare 3.

NextDecade holds fairness pursuits within the Part 1 three way partnership that entitle it to obtain as much as 20.8% of the distributions of obtainable money throughout operations.

FID on Prepare 4 and Prepare 5

NextDecade is concentrating on a optimistic FID and graduation of development of Prepare 4 and associated infrastructure on the Rio Grande LNG Facility in 2H24, and subsequently Prepare 5 and associated infrastructure. Reaching a optimistic FID of this totally permitted enlargement capability on the Rio Grande LNG Facility can be topic to, amongst different issues, finalising and getting into into EPC contracts, getting into into applicable industrial preparations, and acquiring sufficient financing to assemble every prepare and associated infrastructure.

The corporate has commenced sure pre-FID actions for Prepare 4, together with the FEED and EPC contract processes with Bechtel. The corporate expects to finalise the Prepare 4 EPC contract in 1H24.

TotalEnergies SE has LNG buy choices of 1.5 million tpy for every of Prepare 4 and Prepare 5. If TotalEnergies workout routines its LNG buy choices, the corporate presently estimates that a further roughly 3 million tpy of LNG have to be contracted on a long-term foundation for every of Prepare 4 and Prepare 5 prior to creating a optimistic FID for the respective prepare. The corporate continues to advance industrial discussions with numerous potential counterparties and expects to finalise industrial preparations for Prepare 4 within the coming months to assist an FID of Prepare 4 in 2H24.

The corporate expects to finance development of Prepare 4 utilising a mix of debt and fairness funding. The corporate expects to enter into financial institution services for the debt portion of the funding. In reference to consummating the Rio Grande Part 1 fairness three way partnership, the corporate’s fairness companions every have choices to spend money on Prepare 4 and Prepare 5 fairness, which, if exercised, would offer roughly 60% of the fairness funding required for every of Prepare 4 and Prepare 5. Inclusive of those choices, NextDecade presently expects to fund 40% of the fairness commitments for every of Prepare 4 and Prepare 5, and to have an preliminary financial curiosity of 40% in every of Prepare 4 and Prepare 5, rising to 60% after its fairness companions obtain sure returns on their investments in every of the respective trains. The corporate expects to undertake the financing course of for Prepare 4 after the EPC contract and industrial preparations are finalised.

Learn the article on-line at: https://www.lngindustry.com/liquid-natural-gas/12032024/nextdecade-provides-4q23-business-update/