UAE’s XRG deepens US LNG bet with Texas deal

Dubai: XRG has completed the acquisition of an additional stake in Trains 4 and 5 of Rio Grande LNG in Texas, giving the Abu Dhabi-based company exposure across all five trains currently under construction at one of the world’s largest LNG export projects.

Rio Grande LNG, located at the Port of Brownsville, is operated by NextDecade and is expected to start production in the first half of 2027, with first gas into the facility expected in the second half of 2026.

Bigger US gas footprint

XRG acquired an additional 7.6% equity interest in Trains 4 and 5 from an acquisition vehicle of Global Infrastructure Partners, which is part of BlackRock. The deal follows XRG’s earlier investment in Phase 1 of the project, where it acquired an indirect 11.7% stake covering Trains 1, 2 and 3, also through GIP.

The latest transaction has received all customary regulatory approvals, including clearance from the Committee on Foreign Investment in the United States.

Together, Trains 4 and 5 are expected to have total LNG production capacity of about 12 million tonnes per annum. Across all five trains, Rio Grande LNG has around 30 million tonnes per annum of liquefaction capacity under construction.

The investment also gives XRG a stronger position in North America, which the company sees as a core growth region because of its large gas resources, expanding industrial base and favourable investment climate.

XRG’s North American portfolio already includes positions across LNG, chemicals and advanced materials, including Rio Grande LNG and Borouge International’s platform through NOVA Chemicals.

Commercial backing

Each of Trains 4 and 5 has secured long-term LNG offtake agreements with high-credit-quality customers. ADNOC Trading has also entered into a 20-year LNG offtake agreement for 1.9 million tonnes per annum from Train 4 as part of XRG’s initial investment in the project.

Rio Grande LNG is also expected to support the US economy, with around 7,500 construction jobs during peak construction and about 700 long-term jobs in the Rio Grande Valley once the facility is operational.