NextDecade Corporation (NextDecade or the Company) (NASDAQ:
NEXT) today provided an update on developmental and strategic
activities for the third quarter and early fourth quarter 2024.
CEO Commentary
“We continued to make excellent progress on the construction of
Phase 1 at the Rio Grande Facility during the third quarter,” said
Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer.
“The facility continues to progress safely, in line with schedule,
and on budget, and the site has significantly advanced in the past
few months. The Bechtel team has done exemplary work, including
continued pipe work for Train 1, completing the first foundation
pour for Train 2, and preparing to begin deep soil mixing for Train
3. Bechtel has also laid feed gas piping and begun constructing
walls for both storage tanks. We remain committed to working with
Bechtel to prioritize safety and risk management as Phase 1
construction continues.”
“We have been managing the D.C. Circuit Court’s August decision
to vacate the reauthorization of the Rio Grande LNG Facility with
our partners and stakeholders, and we would like to thank the local
Rio Grande Valley community, numerous local and federal elected
officials, our LNG customers, our lenders, our equity partners, the
Brownsville Navigation District, Bechtel, our suppliers, many
industry participants and groups, and all other stakeholders for
their widespread support of the Rio Grande LNG project and the
Company. In October, we filed a petition for rehearing and
rehearing en banc with the Court. The Court’s decision will not
become effective while the appeals process is ongoing, and we
remain committed to taking any and all available legal and
regulatory actions to ensure that Phase 1 will be delivered on time
and on budget and that FID on Trains 4 and 5 will not be unduly
delayed.”
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 September 2024:
- The overall project completion percentage for Trains 1 and 2
and the common facilities of the Rio Grande LNG Facility was 30.5%,
which is in line with the schedule under the EPC contract. Within
this project completion percentage, engineering was 76.1% complete,
procurement was 57.6% complete, and construction was 5.5%
complete.
- The overall project completion percentage for Train 3 of the
Rio Grande LNG Facility was 9.8%, which is also in line with the
schedule under the EPC contract. Within this project completion
percentage, engineering was 17.0% complete, procurement was 21.9%
complete, and construction was 0.1% complete.
Strategic and Commercial
- In July 2024, the Company appointed Tarik Skeik as Chief
Operating Officer. Mr. Skeik has over 20 years of experience
delivering complex global mega projects in LNG, oil, and
petrochemicals across North America, the Middle East, and Asia. He
led the completion and start-up of six greenfield assets, and his
experience includes the planning and execution through initial
operation of projects including the Huizhou Chemicals Complex in
China, Gulf Coast Growth Ventures in the U.S., Banyu Urip in
Indonesia, Kearl Expansion in Canada, and QatarGas 2 in Qatar.
- In August 2024, the Company entered into an EPC contract with
Bechtel for Train 4 and related infrastructure. Price validity
under the EPC contract for Train 4 and related infrastructure
extends through December 31, 2024.
Regulatory
- In August 2024, the U.S. Court of Appeals for the D.C. Circuit
(the “Court”) issued a decision vacating the Federal Energy
Regulatory Commission (FERC) reauthorization of the Rio Grande LNG
Facility on the grounds that FERC should have issued a supplemental
Environmental Impact Statement (“EIS”) during its reauthorization
process. On October 21, 2024, the Company filed a petition for
rehearing and rehearing en banc with the Court.
- The Court’s decision will not be effective until the Court has
issued its mandate, which is not expected to occur until after the
appeals process has been completed.
- At this time, construction continues on Phase 1 at the Rio
Grande LNG Facility.
- The Company expects to take all available legal and regulatory
actions, including but not limited to appellate actions and other
strategies, to ensure that construction on Phase 1 will continue
and that necessary regulatory approvals will be maintained to
enable a positive final investment decision (FID) on Trains 4 and 5
at the Rio Grande LNG Facility.
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 FERC and the Department of Energy, which
allow for development, construction, and operation of up to five
trains and 27 MTPA of LNG exports. Please see Significant Recent
Developments – Regulatory for more information regarding the
Company’s FERC permit.
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 September 2024, progress on Trains 1 through 3 is in line
with the schedule under the EPC contracts. Train 1 foundation pours
continued during the third quarter including compressor
foundations, and the first concrete pour was completed for Train 2.
Pipe work continued to progress on Train 1. Deep soil mixing for
Train 2 continued, and rebar work was completed for the Train 2
main pipe rack. Equipment relocation to begin deep soil mixing is
underway for Train 3, and tank wall construction has begun on Tanks
1 and 2.
Bechtel has continued to make 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 September 2024, Bechtel has issued approximately 96% of the
total purchase orders for Trains 1 and 2 and approximately 98% of
the total purchase orders for Train 3.
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
Achieving a positive FID on Trains 4 and 5 at the Rio Grande LNG
Facility will be subject to, among other things, maintaining
requisite governmental approvals, 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 finalized an EPC contract with Bechtel for Train
4 and related infrastructure. Price validity under the EPC contract
for Train 4 and related infrastructure extends through December 31,
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. The Company entered into an LNG sales and
purchase agreement (SPA) with ADNOC for the sale of 1.9 MTPA of LNG
from Train 4, as well as a non-binding heads of agreement with
Aramco for the sale of 1.2 MTPA of LNG from Train 4. The Company is
working with Aramco to finalize a binding SPA. Additionally, the
Company expects TotalEnergies to exercise its LNG purchase option
for 1.5 MTPA of LNG from Train 4.
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 identical 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 proposed 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/20241107732562/en/
NextDecade Contacts Investors Megan Light
mlight@next-decade.com 832-981-6583
Media Susan Richardson srichardson@next-decade.com
832-413-6400
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