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    NextDecade delays Rio Grande FID until H2 2022

Summary

So far the company only has one sales and purchase agreement in place for 2mn metric tons/year of supply from the facility.

by: Joseph Murphy

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NextDecade delays Rio Grande FID until H2 2022

NextDecade announced on January 3 it was delaying a final investment decision (FID) on the first phase of its Rio Grande LNG project in Texas until the second half of 2022, without specifying a reason.

NextDecade had hoped to sanction the phase, which will produce at least 11mn metric tons/year of LNG, in 2020. But it suffered a setback that year when France's Engie ended talks for supplies from the project, reportedly after the French government raised concerns about methane emissions in the US. The decision was then postponed until 2021, and NextDecade has revealed a further delay in its latest corporate presentation.

Thus far, NextDecade only has one sales and purchase agreement in place for Rio Grande with Shell, for the annual supply of 2mn mt/year of LNG. In its presentation, the company said that negotiations for additional supply contracts were advancing with "multiple counterparties in Europe and Asia." The company will start arranging financing after these additional deals have been finalised, it said.

To improve Rio Grande's climate credentials, NextDecade has said it will deploy carbon capture and sequestration facilities at the plant. The project is expected to host as many as five trains in the future, with a combined output  of 27mn mt/yr.

NextDecade has hired Bechtel as contractor for Rio Grande. In March last year it extended its agreements with Bechtel, keeping pricing terms in place until the end of 2021 and extending the validity of the engineering procurement and construction contracts until July 31, 2022.