Bechtel Obtains EPC Contract for NextDecade’s Rio Grande LNG

NextDecade Corp.’s subsidiary, Rio Grande LNG Train 4, executed a lump-sum turnkey engineering, procurement, and construction (EPC) contract with Bechtel Energy. The contract, worth approximately $4.3 billion, covers the construction of Train 4 and associated infrastructure at the Rio Grande LNG Facility. Price validity extends through December 31, 2024.

The total estimated project costs for Train 4 and related infrastructure are expected to be $6-$6.2 billion. These estimations align with the per-train cost of Phase 1 at the Rio Grande LNG Facility, which is presently under construction. NextDecade is targeting a positive final investment decision for Train 4 in the latter half of 2024, subject to garnering commercial support and financing to build Train 4 and its infrastructure.

Rio Grande LNG is located on a 984-acre site near Brownsville, TX, and is expected to offer emissions reduction of more than 90% through a proposed carbon capture and storage (CCS) project. The CCS project is slated to capture and permanently sequester more than 5 mtpa of CO₂, which is equivalent to eliminating 1 million vehicles from the road on a yearly basis.

Rio Grande LNG News

In May 2024, the Abu Dhabi National Oil Co. (ADNOC) acquired an 11.7% stake in Phase 1—Trains 1, 2, and 3—of NextDecade’s Rio Grande LNG (RGLNG) export project in Texas. In addition, the partners established a 20-year LNG offtake agreement from RGLNG Train 4. According to the agreement, ADNOC will receive 1.9 mtpa of LNG from the project on a free-on-board basis at a price indexed to Henry Hub.

The acquisition of Phase 1 RGLNG equity was achieved through an investment vehicle of Global Infrastructure Partners (GIP). ADNOC received a segment of GIP’s equity interest in Phase 1 and NextDecade will maintain its expected economic interest in this phase—it also retains interests in the Train 4 and Train 5 expansion capacity. ADNOC’s purchase also guarantees the option, granted by GIP, for potential equity participation in the planned Trains 4 and 5.

In June, subsidiaries of Aramco and NextDecade completed a non-binding heads of agreement (HoA) for a 20-year LNG purchase and sale agreement for offtake from Train 4 at RGLNG. According to the HoA, Aramco plans to purchase 1.2 mtpa of LNG for 20 years.

"We look forward to finalizing the terms of a long-term LNG offtake agreement with NextDecade, as we explore opportunities to expand our presence in international energy markets,” said Nasir K. Al-Naimi, Aramco Upstream President. “We expect LNG to play an important role in meeting the rising demand for secure and efficient energy.”