TotalEnergies will buy a 17.5% stake in U.S. liquefied natural gas developer NextDecade for $219 million, the French group said on June 14, part of a broader deal to enable the Texas company's Rio Grande LNG export project to proceed.
Shares of NextDecade rose 12.3% to $5.76 in premarket trading.
NextDecade said it had entered into framework agreements with Global Infrastructure Partners (GIP) and TotalEnergies to facilitate the final investment decision for the Rio Grande LNG project, expected to be confirmed by the end of June.
Demand for U.S. LNG increased after several countries slowed purchases of Russian energy and imposed sanctions on Moscow after Russia's invasion of Ukraine last year, prompting a race to bring more U.S. export terminals online.
"Our involvement in this project will add 5.4 million tons per year of LNG to our global portfolio, strengthening our ability to ensure Europe's security of gas supply, and to provide our Asian customers with an alternative fuel to coal," TotalEnergies Chairman and CEO Patrick Pouyanne said.
The French energy major is the world's third largest LNG player, with a roughly 12% market share and global portfolio of about 50 million tons of LNG per year.
It has said it aims to grow its LNG business 3% annually, and expects natural gas to account for half of all its energy sales by 2030.
British rival Shell has also announced plans to grow its natural gas business and defend its position as the top global LNG player.
The Rio Grande LNG export plant in south Texas has been in development for several years, suffering repeated delays after lead financier Societe Generale left the project in 2022 under pressure from climate and indigenous activists.
NextDecade plans for it to produce up to 27 million tons of LNG annually, with a carbon sequestration component to the project to reduce greenhouse gas emissions.
The Texas company has deals to supply LNG to Japan's Itochu , oil majors Shell and Exxon Mobil, France's ENGIE and China's ENN.
Recommended Reading
Pembina, Haisla Nation Take $4B FID on Cedar LNG
2024-06-25 - Pembina Pipeline Corp. and the Haisla Nation took a $4 billion final investment decision (FID) on the 3.3-mtpa Cedar LNG project. The project is expected to start operations in late 2028.
Viaro Energy to Buy Shell, Exxon’s North Sea Assets
2024-08-01 - When the transaction is completed, Viaro Energy will control 11 fields that produced 28,000 boe/d in 2023, 5% of the U.K.'s total gas production.
Come Together: California Resources, Aera Merge for Scale, Drilling Runway
2024-07-10 - California Resources Corp. closed an acquisition of Aera Energy to become California’s top oil and gas producer. Now, CRC President and CEO Francisco Leon wants to grow from a one-rig to an eight-rig drilling program—but faces stiff pushback from regulators and environmental advocates in the Golden State.
Exclusive: Aethon M&A Gambit Pays Off with Woodside-Tellurian Deal
2024-08-07 - Aethon Energy, already a large LNG feed-gas supplier, sees Woodside’s acquisition of Tellurian and the Driftwood LNG project as a validation of the natural gas industry’s prospects.
Ex-BP America Chair Dave Lawler to Lead Kimmeridge’s South Texas Gas E&P
2024-06-25 - Separately, Kimmeridge has purchased more than 90% control of Gulf Coast LNG developer Commonwealth LNG.