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NextDecade advancing in its Rio Grande LNG project: S&P

NextDecade

NextDecade is advancing in the approval for the construction of at least two trains at its proposed Rio Grande LNG project, to export liquified natural gas from Texas; according to a report from S&P Global, citing a company’s investor presentation.

Firstly, the company has only secured one contract for its terminal; with Shell, for 2 million mt/year. Substantially less than the 11 million mt/year of supply that is expected on the first phase of the train development, in Brownsville.

Secondly, the full project would produce up to 27 million mt/year when fully built. However, on the presentation, NextDecade said it is progressing in commercial operations for the project; specifically, it is at the final stages of negotiations with counterparties for a final investment decision; as soon as this year.

Thirdly, although the presentation did not disclose details on the talks, or any financials, it is presumed that there are no European parties involved in the negotiations. As, in November 2020, Engie halted talked with NextDecade on a deal for Rio Grande LNG.

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NextDecade not the only one is struggle

Moreover, the halt came after European utilities and energy companies are further pushed from environmental interests, from investors and governments alike, to keep from dealing with fossil fuels from the U.S. Specifically, U.S. shale gas.

In fact, since that announcement, NextDecade has launched several initiatives to make its project greener; this includes a carbon capture and storage project; to enter development shortly after it approves the first phase of the LNG terminal.

Furthermore, according to S&P, the company is also “partnering with a Colorado company to measure and report the GHG intensity of the LNG to be produced at the export facility.” Such initiatives would make the project more attractive to investors; as it would produce gas more responsibly.

Finally, this trend is not only endured by NextDecade; most developers of new LNG terminals are in a continued struggle to secure sufficient commercial support to advance their projects.

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