NextDecade Corp. has again pushed back a final investment decision for its Rio Grande liquefied natural gas (LNG) export project in Brownsville, TX.
The company is now targeting the second half of 2022 for an FID on 11 million metric tons/year (mmty), or two liquefaction trains, according to an updated investor presentation released on Monday. The company previously delayed sanctioning in 2020, at the time pushing back an FID to the end of last year.
NextDecade has signed just one customer to take LNG from the proposed 27 mmty, five-train terminal. Shell plc agreed to purchase 2 mmty in 2019 for a term of 20 years at prices linked to Brent crude and the Henry Hub index. NextDecade said in its latest presentation that negotiations were advancing with multiple buyers in Europe and Asia. The company needs to secure more offtakers so it can sanction the project and move toward the financing stage.
According to the presentation, it is targeting contract terms of 10-20 years and willing to offer LNG at prices linked to Henry Hub, Agua Dulce, the Japan-Korea Marker, Title Transfer Facility or Brent crude.
NextDecade is also working to develop carbon capture and sequestration (CCS) systems at the plant. Late last year, it requested a limited amendment to modify FERC’s 2019 authorization to site, construct and operate the terminal so it can incorporate CCS technology into the approved site.
The technology would allow the terminal to capture and sequester 90% of the carbon dioxide (CO2) produced. Once captured, the CO2 would be transported via pipeline to a Class VI CO2 injection well regulated by the Environmental Protection Agency (EPA) and relevant state agencies.
NextDecade’s Michael Mott, senior vice president of strategy, told NGI that the company expects FERC to approve the modification this year. He said the pending CCS filing has no impact on the approvals Rio Grande has received from the Federal Energy Regulatory Commission to date.
“All major approvals are in hand for the LNG project including the LNG terminal design and our ability to mobilize to site and perform full site preparation and test pilings,” he said.
The EPA has permitted only two Class VI wells, which took years to complete. Mott said NextDecade anticipates approval for its injection wells from federal and state agencies within Rio Grande’s construction timeline. The company expects to have the permits in hand by the time it enters commercial service. NextDecade has not disclosed a new date for commercial operations since it delayed an FID in 2020.
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