- According to its website, NextDecade has been delayed by as many as three months when it expects to make an FID on its proposed Rio Grande LNG export project.
- Its expectation of an FID on up to three liquefaction trains, representing a total capacity of about 13.5 million mt/year by the end of the third quarter in September.
- The company expects to receive its Federal Energy Regulatory Commission permit certificate later this quarter and is targeting a 2023 startup.
According to an article published in Platts, NextDecade delayed by as many as three months when it expects to make a final investment decision on its proposed Rio Grande LNG export project in Brownsville, Texas.
Revised timeline issued
On September 17, the company has issued a revised timeline that included an investor presentation posted on the developer’s website.
The up to 27 million mt/year terminal to be sited along the Gulf of Mexico is among a handful of US liquefaction projects that are being closely watched by the market to determine what the global supply picture will look like during the early to mid-2020s.
NextDecade’s offtake contract
NextDecade notched its first offtake contract when it announced in April a 20-year agreement with Royal Dutch Shell for 2 million mt/year of LNG. At the time, it maintained its expectation of an FID on up to three liquefaction trains, representing a total capacity of about 13.5 million mt/year by the end of the third quarter in September. In May, it tweaked its guidance by saying it anticipated FID as early as the end of the Q3. Its new presentation said a decision whether to advance the project would come in the Q4, which ends in December.
“We do not expect this to impact the startup date of Rio Grande LNG,“ spokeswoman Toni Beck said in an email responding to questions.
Multiple potential LNG buyers
NextDecade remains in ongoing commercial talks with multiple multiple potential LNG buyers to secure sufficient contracts to reach FID, the presentation said. It expects to receive its Federal Energy Regulatory Commission permit certificate later this quarter and is targeting a 2023 startup.
Long-term contracts to support facilities
With the US currently responsible for much of the new liquefaction capacity growth worldwide and China responsible for much of the new LNG demand growth, developers of the second wave of American projects have been aggressively courting Chinese buyers for long-term contracts to support their facilities.
But the protracted trade war between the two countries has effectively cut off those prospects for now. No spot US LNG cargoes have been delivered to China since March, and counterparties in China have been waiting for a resolution before signing new long-term deals.
Look out for end-users
Developers have been looking to end-users elsewhere in Asia and in Europe, as well as to global commodity traders that are expanding their LNG portfolios, to pick up the slack in the meantime.
NextDecade has been pitching its proximity to stable supplies of cheap feed gas from the Permian and other shale basins, as well as its willingness to offer flexibility in pricing mechanisms used for contracts. Three-quarters of the Shell offtake agreement will be indexed to Brent, with the rest indexed to US gas prices, including Henry Hub.
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Source: Platts
