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Rio Grande LNG project final investment decision delayed to second half of 2022

NextDecade has delayed an expected final investment decision related to its proposed Rio Grande LNG export project in Texas to the second half of 2022, an investor presentation posted Jan. 3 on the company’s website said.

The company had previously targeted a decision on a first phase consisting of at least two liquefaction trains by the end of 2021.

The adjusted timing comes as NextDecade continues to seek sufficient supply deals with buyers to support the cost of construction. To date, it has secured a single long-term contract, with Royal Dutch Shell, covering 2 million mt/year of the about 11 million mt/year of supply that is expected to make up the first phase of the project in Brownsville. The full project, as currently proposed, would involve five trains and 27 million mt/year of capacity.

During 2021, there was a flurry of commercial activity tied to current and proposed US LNG export terminals. The main beneficiaries were Cheniere Energy and Venture Global LNG, especially with Chinese buyers as high spot prices in end-user markets spurred new term deals that carry a lower fixed price. Two proposed US projects were scrapped during the year – Pembina’s Jordan Cove in Oregon and Exelon-backed Annova LNG, which was to be built in Brownsville near NextDecade’s site.

In its new investor presentation, NextDecade said negotiations were “advancing with multiple counterparties in Europe and Asia” and that financing would “commence” upon execution of additional sale and purchase agreements. It did not elaborate. A company official did not immediately respond to a message seeking further comment.

NextDecade has said it plans to advance a carbon capture and storage project shortly after it sanctions the first phase of the liquefaction terminal. NextDecade is also partnering with a Colorado company to measure and report the greenhouse gas intensity of the LNG to be produced at the export facility. The goal of the reporting initiative includes enabling the development of responsibly sourced natural gas from producers in the Permian Basin and Eagle Ford shale that will be fed to the terminal.

In November, NextDecade pitched to US regulators a limited amendment to its federal authorization for the LNG terminal that would allow it to voluntarily capture and store CO2 produced at the facility. That proposal came as a federal appeals court found fault with the original Federal Energy Regulatory Commission authorization for the LNG project, remanding FERC’s orders to the commission without vacating them.

NextDecade expects to receive FERC approval in 2022 for the CCS project, according to the new investor presentation.
Source: Platts

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