TotalEnergies (TTEF.PA) will buy a 17.5% stake in U.S. liquefied natural gas developer NextDecade (NEXT.O) for $219 million, the French group said on Wednesday, 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 (8001.T), oil majors Shell (SHEL.L) and Exxon Mobil (XOM.N), France's ENGIE (ENGIE.PA) and China's ENN.
