The US Court of Appeals for the D.C. Circuit has invalidated the US Federal Energy Regulatory Commission’s (FERC) authorisation of NextDecade’s Rio Grande LNG export facility located at the Port of Brownsville, Texas.
The court cited the lack of a supplemental Environmental Impact Statement (EIS) during FERC’s remand process as the basis for its decision. The order raises questions about the future timeline for the expansion of the liquefied natural gas (LNG) export project, specifically the commencement of Train 4.
NextDecade has expressed disappointment with the court’s decision and is currently reviewing its implications while evaluating all potential options. The company had taken a positive final investment decision (FID) on Phase 1 of the project in July 2023.
Despite the latest court ruling, the company disclosed that construction of the first phase, comprising the first three liquefaction trains and related infrastructure, continues unabated. Completion of this is anticipated by early 2029, reported Reuters.
The Rio Grande LNG facility, which, upon full completion, is expected to have a capacity of 27 million tonnes per annum (MTPA) across five trains.
NextDecade, through its subsidiary, Rio Grande LNG Train 4, has signed a lump sum turnkey engineering, procurement, and construction (EPC) contract with Bechtel Energy. This agreement covers the construction of Train 4 and associated infrastructure at the Rio Grande LNG Facility.
Under the terms of the EPC contract, Rio Grande LNG Train 4 will pay Bechtel approximately $4.3bn.
Overall, the projected cost for Train 4 and its related infrastructure is between $6bn and $6.2bn. This aligns with the cost per train of the three-train Phase 1 project at the Rio Grande LNG Facility, which is currently under construction.
NextDecade aims to achieve a positive FID for Train 4 in the latter half of 2024. The decision is contingent on securing adequate commercial support and obtaining necessary financing for the construction of Train 4 and its infrastructure.
In May this year, ADNOC acquired a 11.7% stake in Phase 1 of the Rio Grande LNG project. The stake was purchased through an investment vehicle of Global Infrastructure Partners (GIP).
ADNOC has also inked a 20-year LNG offtake agreement with NextDecade for 1.9 million tons per annum (mtpa) from Train 4, based on a free on board (FOB) pricing model linked to the Henry Hub index.
