NextDecade seeks more time to build Rio Grande LNG export plant

NextDecade asked US energy regulators for a two-year extension to construct its proposed Rio Grande LNG export plant in Texas.

In 2019, the company won approval from the US FERC to build the LNG terminal with up to five trains and a total capacity of 27 mtpa by November 22, 2026.

Now, NextDecade is seeking to extend that deadline until November 22, 2028, according to a FERC filing dated April 6.

NextDecade told FERC that Rio Grande LNG was impacted by “unforeseeable developments in the global LNG market as a result of the Covid-19 pandemic, including major disruptions in world energy markets due to a temporary but significant demand destruction resulting from global lock-downs.”

According to the company, the pandemic has affected the ability of Rio Grande LNG to enter into additional long-term offtake contracts with customers sufficient to enable the company to achieve a final investment decision (FID).

More LNG supply contracts to come

However, despite the pandemic, commercialization of Rio Grande LNG has accelerated in the past quarter, NextDecade said.

The company revealed two LNG supply deals with Chinese firms in the last two weeks.

Under the first 20-year HoA announced on March 24, NextDecade would supply up to 1.5 mtpa of LNG indexed to Henry Hub to Guangdong Energy Group Natural Gas.

After that, the Rio Grande developer said it had signed a deal to supply liquefied natural gas to a unit of Chinese independent gas distributor ENN.

Under this 20-year sales and purchase deal, ENN LNG would buy 1.5 mtpa of LNG indexed to Henry Hub on a free-on-board basis.

The LNG supply would come from the first two Rio Grande trains with a capacity of 11 mtpa.

Besides these deals, NextDecade said it expects to execute more contracts over the next quarter.

Following a recent deal, the US will work to supply at least 15 billion cubic meters (bcm) of LNG to European Union markets this year, as the EU looks to slash dependence on Russian gas.

NextDecade said Rio Grande LNG would “play an important role in meeting Europe’s
demand for LNG.”

The company added it anticipates beginning construction and making a positive FID on a minimum of two trains in the second half of 2022.

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