NextDecade Corporation has announced significant strides in the development of its Rio Grande LNG Facility in Brownsville, Texas, by finalizing the engineering, procurement, and construction (EPC) contract for Train 4 and executing a new EPC contract for Train 5 with Bechtel Energy Inc. These pivotal agreements mark a crucial step forward for the multi-billion dollar project, bringing the company closer to achieving final investment decisions (FIDs) for both liquefaction trains.
The refreshed lump-sum, turnkey EPC contract for Train 4 is valued at approximately $4.77 billion. Concurrently, NextDecade’s subsidiary, Rio Grande LNG Train 5, LLC, has signed a similar EPC contract with Bechtel for Train 5, costing approximately $4.32 billion. Both contracts feature pricing validity extending through September 15, 2025, providing a clear window for NextDecade to secure the necessary financing and commercial commitments.
Beyond the EPC costs, NextDecade projects additional expenses for owner’s costs, contingencies, financing fees, and interest during construction for each train and its supporting infrastructure. These are estimated to range between $1.8 billion and $2.0 billion for both Train 4 and Train 5, based on current market estimates and expected interest rates. The substantial investment underscores the scale and ambition of the Rio Grande LNG project, which aims to become a major player in the global liquefied natural gas market.
Progress towards a Final Investment Decision (FID) for Train 4 is well underway, with NextDecade confirming that commercialization for this train is complete. The company has already initiated the financing process and anticipates reaching a positive FID for Train 4 before the September 15, 2025, pricing validity deadline, contingent upon securing adequate financing. This signifies a strong commercial backing for Train 4, paving the way for its construction.
For Train 5, NextDecade recently secured a significant 20-year, 2.0 million tonnes per annum (MTPA) LNG Sale and Purchase Agreement (SPA) with JERA, Japan's largest power generator. This agreement provides a solid foundation for Train 5’s commercial viability. The company is actively working to commercialize an additional 2.5 MTPA under long-term LNG SPAs to further bolster support for a positive FID on Train 5. Similar to Train 4, the financing process for Train 5 has commenced, with NextDecade targeting an FID before the pricing validity period expires, subject to securing appropriate commercial support and financing.
The Rio Grande LNG Facility, located near Brownsville, Texas, is designed to have a potential liquefaction capacity of approximately 48 MTPA once fully developed.
