A potential obstacle to construct the proposed Rio Grande and Texas LNG facilities in South Texas has been cleared after an appellate court upheld a decision to dismiss a lawsuit over leases.

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The Thirteenth Court of Appeals, which serves the South Texas area, ruled that a trial court correctly dismissed a case against the Brownsville Navigation District. The district had lease agreements with several liquefied natural gas export terminal developers (No. 13-20-00479-CV). The lawsuit was filed in 2020 by the City of Port Isabel, adjacent to Brownsville, and city officials.

The appeals court also agreed that the plaintiffs’ arguments that the projects were approved without a sufficient environmental analysis were “attempts to use artful pleading” to circumvent Federal Energy Regulatory Commission authority, according to the opinion written by Judge Clarissa Silva.

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“The trial court did not err when it concluded that appellants’ suit amounted to an impermissible collateral attack” on FERC’s “exclusive jurisdiction and dismissed their claims with prejudice,” Silva wrote.

FERC in 2019 approved NextDecade Corp.’s Rio Grande LNG and Texas LNG projects under development by a Glenfarne Group LLC subsidiary. That decision was remanded back to FERC last August by the U.S. Court of Appeals for the District of Columbia Circuit. The circuit court cited questions about the review of potential climate impacts from associated emissions.

In the lawsuit filed by Port Isabel, plaintiffs argued that underrepresented impacts from pollution associated with LNG terminals would damage the area’s economy as a fishing and tourist destination. At the time, Rio Grande LNG, Texas LNG and Annova LNG, canceled last year, were planned for sites at the Port of Brownsville 20 miles from the city.

Rio Grande is estimated to have a possible export capacity of 27 million metric tons/year (mmty). The project is unsanctioned, but limited construction is ongoing. NextDecade is also working to develop carbon capture and sequestration systems (CCS) at Rio Grande.

NextDecade since late March has signed two offtake agreements for Rio Grande. It now has three offtake agreements in place that cover nearly all of the capacity of one of the terminal’s five proposed trains.

Texas LNG has no definitive offtake contracts for its 4 mmty terminal project. In January, the firm signed a precedent agreement with Enbridge Inc. to expand the Valley Crossing Pipeline to bring 720 MMcf/d to the terminal over 20 years.