TotalEnergies Inks 20-Year LNG Deal With NextDecade, Awaits Key Investment Decision

TotalEnergies (NYSE:TTE) signed an agreement with NextDecade on Tuesday to purchase 1.5 million tons per annum of liquefied natural gas from the future Train 4 liquefaction unit at the Rio Grande LNG facility.

The agreement will last 20 years and take effect if NextDecade makes a positive Final Investment Decision on Train 4.

The company’s shares were trading slightly higher in the premarket session.

“TotalEnergies has been a key contributor to the success of Rio Grande LNG Phase 1, and we are pleased to be expanding our strategic partnership with TotalEnergies with the execution of this Train 4 SPA”, said Matt Schatzman, NextDecade’s chairman and CEO.

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The company said in a statement that the agreement strengthens TotalEnergies’ role in the U.S. LNG sector and supports NextDecade’s goal of moving Train 4 to the next stage of development.

TotalEnergies owns a 16.7% stake in Phase 1 of the Rio Grande LNG project, which includes three LNG trains under construction in southern Texas.

It has already committed to buying 5.4 MTPA of the roughly 17.5 MTPA expected from this phase, which is slated to begin operations in 2027. Additionally, TotalEnergies holds a 17.5% ownership in NextDecade, the facility’s operator and main shareholder.

A green light on investment will allow the SPA to go into effect and pave the way for further regional infrastructure growth.

“This SPA completes the commercial support we need for Rio Grande LNG Train 4, and we are now focused on progressing Train 4 toward a positive FID,” Schatzman adds.

According to Benzinga Pro, TTE stock has lost over 21% in the past year. Investors can gain exposure to the stock via the 2023 ETF Series Trust II GMO International Value ETF (NYSE:GMOI).

Price Action: TTE shares are trading higher by 0.56% to $57.07 premarket at last check Tuesday.

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