This story requires a subscription
This includes a single user license.
Last month, the US Court of Appeals for the D.C. Circuit issued an order vacating FERC’s remand authorization of NextDecade’s Rio Grande LNG facility and the pipeline saying that the FERC should have issued a supplemental EIS during its remand process.
“On remand, the Commission will consider whether to grant a Natural Gas Act (NGA) section 3(a) authorization for the Rio Grande LNG terminal and an NGA section 7(c) certificate of public convenience and necessity for the Rio Bravo pipeline project,” the FERC said in a filing dated September 13.
The regulator said it must determine whether to authorize the projects under the NGA, taking into consideration the factors discussed in the court’s decision.
According to the FERC, the supplemental EIS will “tier off Commission staff’s analysis and conclusions as documented in staff’s April 26, 2019 final EIS for the projects.”
The supplemental EIS will focus on the issues identified by the court as requiring further analyses (e.g., environmental justice impacts, air quality, and alternatives).
“The Commission will use this supplemental EIS in its decision-making process to determine whether to authorize the Rio Grande LNG and Rio Bravo pipeline projects in light of the court’s vacatur and remand,” it said.
By this notice, the Commission also requests public comments on the scope of issues to address in the supplemental EIS.
This notice identifies the Commission staff’s planned schedule for completion of the final supplemental EIS for the projects, which is based on an issuance of the draft supplemental EIS in March 2025, opening a 45-day comment period.
The regulator expects to issue notice of availability of the final supplemental EIS on July 31, 2025, and to issue final order on November 20, 2025.
$18.4 billion LNG project “in jeopardy”
NextDecade’s CEO Matt Schatzman said last month the company is committed to taking all available legal and regulatory actions to ensure that the first phase of its Rio Grande LNG project in Texas will be delivered on time and budget and that FID of trains 4 and 5 will not be unduly delayed.
The company also recently created a new website (standwithrglng.com) to address the issues following the decision.
NextDecade says this “unprecedented court ruling is putting an $18.4 billion LNG project in jeopardy.”
“The ruling has far-reaching implications that threaten all other infrastructure projects subject to federal regulation,” it said.
In July 2023, NextDecade took the final investment decision on the first three Rio Grande trains and completed $18.4 billion project financing.
NextDecade awarded the $12 billion EPC contract to compatriot Bechtel, and work officially kicked off on the plant in October last year.
The firm also closed a joint venture agreement for the first phase, which included about $5.9 billion in financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala, and TotalEnergies.
NextDecade holds equity interests in the Phase 1 joint venture, which entitle it to receive up to 20.8 percent of the cash distributions during operations.
Phase 1, with a nameplate liquefaction capacity of 17.6 mtpa, has 16.2 mtpa of long-term binding LNG sale and purchase agreements.
These include deals with TotalEnergies, Shell, ENN, Engie, ExxonMobil, Guangdong Energy Group, China Gas Hongda Energy Trading, Galp, and Itochu.
Fourth train
Including trains 4 and 5, the Rio Grande LNG facility would have a capacity of 27 mtpa.
NextDecade recently signed a lump sum turnkey engineering, procurement, and construction (EPC) contract with Bechtel to construct the fourth train and related infrastructure at the Rio Grande LNG facility.
The company’s unit Rio Grande LNG Train 4 agreed to pay Bechtel about $4.3 billion for the work under the EPC contract.
It said the total estimated project costs for Train 4 and related infrastructure are expected to be $6- $6.2 billion, in line with the per-train cost of the three-train Phase 1 at the Rio Grande LNG facility.
In June, Saudi Arabia’s energy behemoth Aramco signed a non-binding deal to buy LNG from NextDecade’s Rio Grande LNG export terminal.
Under the terms of heads of agreement, Aramco expects to buy 1.2 mtpa of LNG for 20 years from the fourth Rio Grande LNG train on a free on board basis, at a price indexed to Henry Hub.
This agreement with Aramco followed a deal with UAE’s Adnoc announced on May 10.
Adnoc purchased an 11.7 percent stake in the first phase of NextDecade’s Rio Grande LNG export terminal from Global Infrastructure Partners.
Adnoc and NextDecade also entered into a 20-year LNG offtake agreement for the fourth Rio Grande LNG train.
The LNG offtake agreement is for 1.9 mtpa from Train 4, on a FOB basis at a price indexed to Henry Hub.
Construction update
NextDecade also released the latest construction update for the first phase of its Rio Grande LNG export terminal.
Besides three liquefaction trains, the first phase includes building two 180,000-cbm full containment LNG storage tanks, and two jetty berthing structures designed to load LNG carriers up to 216,000 cbm in capacity.
Phase 1 also includes associated site infrastructure and common facilities including feed gas pretreatment facilities, electric and water utilities, two totally enclosed ground flares for the LNG tanks, and marine facilities, etc.
According to Rio Grande LNG’s August construction report sent to the US FERC, the project completed placement of the mud mat for LNG Tank 2, pile driving of breasting dolphins for Jetty 2, and soil stabilization via deep mixing method (DMM) within Train 2.
The project started installation of grounding cable and mud mat placement in Train 2, pouring of LNG Tank 1 concrete ring foundation, and mud mat placement in ground flares 1 and 2.
Ongoing construction activities during the reporting period include construction of Jetties 1 and 2, underground firewater piping installation and testing, site civil activities such as concrete foundation work, construction of the material offloading facility, structural steel erection within
Train 1, and LNG spill trench placement in Train 1.
In September 2024, Rio Grande will continue the ongoing work and expects completion of LNG Tank 1 ring foundation within the period. The Project plans to start initial pouring of concrete for the Train 2 foundation, LNG Tank 2 ring foundation, and DMM within Train 3.