NextDecade Shares Fall 23% as LNG Project Funding Disappoints Investors
(Reuters) — NextDecade Corp. shares fell 23% on Thursday on investor worries over the terms of $18.4 billion financing the U.S. LNG developer obtained to go ahead with the long-delayed Phase 1 of Rio Grande LNG export facility.
The company had on late Wednesday said it was one of the largest greenfield energy project financings in the history of the United States, but analysts said it may have given up more equity than expected to its financial partners.
RELATED: NextDecade Makes Final Investment Decision on Rio Grande LNG Phase 1
NextDecade said its financial partners and TotalEnergies combined will hold stake that could fetch them at least 79.2% of the cash flow generated from Phase 1 of the project.
TD Cowen said this was 20% higher than its expectations. It also said the lump-sum turnkey engineering, procurement and construction contracts of $12 billion were lower than its forecast of $12.5 billion.
"Investors are looking at the huge portion of cash flow that the new project level investors get relative to the equity holders and don't love that," said Sean Morgan, an analyst at Evercore.
NextDecade is expected to produce 27 million tonnes of LNG a year from the facility. Its shares have gained 32% so far this year, including session losses.
Related News
Related News
- 1,000-Mile Pipeline Exit Plan by Hope Gas Alarms West Virginia Producers
- Valero Plans to Shut California Refinery, Takes $1.1 Billion Hit
- Greenpeace Ordered to Pay $667 Million to Energy Transfer Over Dakota Access Pipeline Protests
- Three Killed, Two Injured in Accident at LNG Construction Site in Texas
- Boardwalk’s Texas Gas Launches Open Season for 2 Bcf/d Marcellus-to-Louisiana Pipeline Expansion
- New Alternatives for Noise Reduction in Gas Pipelines
- Construction Begins on Ghana's $12 Billion Petroleum Hub, But Not Without Doubts
- Missouri Loses Control Over 1.5 Million-Mile Gas Pipeline Network as Feds Step In
- South Dakota Governor Signs Bill Banning Eminent Domain for Carbon Pipeline
- Woodside May Delay Final Investment Decision on Louisiana LNG to Q2, CEO Says
Comments