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
CNX, Appalachia Peers Defer Completions as NatGas Prices Languish
2024-04-25 - Henry Hub blues: CNX Resources and other Appalachia producers are slashing production and deferring well completions as natural gas spot prices hover near record lows.
US Drillers Add Oil, Gas Rigs for First Time in Four Weeks: Baker Hughes
2024-05-17 - The oil and gas rig count rose by one to 604 in the week to May 17.
Proven Volumes at Aramco’s Jafurah Field Jump on New Booking Approach
2024-02-27 - Aramco’s addition of 15 Tcf of gas and 2 Bbbl of condensate brings Jafurah’s proven reserves up to 229 Tcf of gas and 75 Bbbl of condensate.
Repsol to Drop Marcellus Rig in June
2024-04-26 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.
Barnett & Beyond: Marathon, Oxy, Peers Testing Deeper Permian Zones
2024-04-29 - Marathon Oil, Occidental, Continental Resources and others are reaching under the Permian’s popular benches for new drilling locations. Analysts think there are areas of the basin where the Permian’s deeper zones can compete for capital.