NextDecade Pushes Back Investment Decision For Rio Grande LNG

NextDecade Pushes Back Investment Decision For Rio Grande LNG
NextDecade has pushed back the timeline for its final investment decision to build its proposed Rio Grande LNG export plant.

U.S. liquefied natural gas developer NextDecade has pushed back the timeline for its final investment decision to build its proposed Rio Grande LNG export plant to the second half of 2022.

The nearly $15.7 billion project has already seen its fair share of delays. This is the second time it was delayed since 2020. After the previous delay, the FID was scheduled to be made by the end of last year. The LNG plant was originally scheduled to start production in 2023.

To remind, NextDecade plans to build two liquefaction trains with a capacity of 11 million tonnes per annum which will be later expanded to five trains with a capacity of 27 mtpa.

The company’s only customer for Rio Grande LNG is Shell which made a deal for 2 mtpa back in 2019. The supply deal is supposed to last 20 years.

According to NextDecade’s newest investor presentation released at the start of the week, the company is working on signing new long-term deals and that ‘SPA negotiations were advancing with multiple counterparties in Europe and Asia’, but there was no mention of any company names.

For the development of the Rio Grande plant, NextDecade awarded a lump-sum turnkey EPC contract to Bechtel in May 2019. The two expect EPC costs for the first two trains, along with two tanks and a jetty, to reach about $7.5 billion. The total price for the other three trains and associated infrastructure is around $10 billion. The deal for the third train alone is worth $2.323 billion.

Another aspect NextDecade will incorporate into the project is carbon capture from the LNG export plant. The firm expects to capture and store more than 5 million metric tons of CO2 annually.

The inclusion of CCS in the project was made public in March 2021 and the company stated at the time that Rio Grande would be 'the greenest LNG project in the world.'

NextDecade expects the CCS project to reduce permitted carbon dioxide emissions at Rio Grande by more than 90 percent. The firm is hoping to receive approval from FERC for the CCS project sometime during 2022.

To contact the author, email bojan.lepic@rigzone.com


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