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Rio Grande LNG pulls carbon capture plans following court-imposed development setback
In August alone, Texas-based LNG firm NextDecade has seen a US court overturn regulatory approval for development of its LNG export facility and has withdrawn a proposed carbon capture and storage plan, citing a lack of "sufficient development"
NextDecade Corporation’s subsidiary Rio Grande LNG (RGLNG) has withdrawn a construction application for a carbon capture and storage (CCS) facility that has been under review by the US Federal Energy Regulatory Commission (FERC).
The company said it remains committed to "advancing and lowering the cost" of CCS despite requesting FERC terminate its CCS application.
“The CCS project at RGLNG is not sufficiently developed to allow the FERC review to continue at this time. We remain committed to advancing and lowering the cost of utilising carbon capture and storage and helping companies reduce their facility emissions and achieving their clean energy goals,” NextDecade chairman and chief executive Matt Schatzman said.
News of the aborted CCS plans comes shortly after a court ruling threatening to negate FERC development approval for NextDecade’s Rio Grande LNG export facility.
In early August 2024, a US Court of Appeals issued an order vacating FERC’s authorisation of the Rio Grande LNG facility on the grounds that FERC should have issued a supplemental Environmental Impact Statement during its review process.
Next Decade said it will appeal the ruling and the court’s decision will not be effective until it issues a formal mandate, which is "not expected to occur until the appeals process has been completed".
“NextDecade has recently made excellent strides toward achieving its dual goals of constructing Phase 1 at the Rio Grande LNG facility safely, on schedule, and on budget, and progressing Train 4 expansion capacity toward a positive final investment decision (FID),” Mr Schatzman said.
“We are committed to taking any and all available legal and regulatory actions to ensure Phase 1 will be delivered on time and on budget and achieving FID on Trains 4 and 5."
In an earnings call in early 2024, NextDecade executives had held out the prospect of a final investment decision on the facility’s expansion to add fourth and fifth liquefaction trains in the latter half of 2024.
NextDecade said at the time it was targeting FID and commencing construction of Train 4 and related infrastructure at the Rio Grande LNG facility in the second half of 2024, "and subsequently Train 5 and related infrastructure".
NextDecade is developing the Rio Grande LNG facility on the north shore of the Brownsville Ship Channel in south Texas through its partially owned subsidiary Rio Grande LNG. According to the company, the Rio Grande LNG facility has received the necessary approvals and authorisations required for construction, "including those from the Federal Energy Regulatory Commission and the Department of Energy, which allow for the development, construction and operation of up to five trains and 27M tonnes per annum of LNG exports".
Unlike Trains 1 and 2, no construction had begun on Train 3, according to NextDecade’s quarterly report, which said all three trains are on schedule.
In addition to handing out engineering, procurement and construction contracts in 2023, NextDecade secured a US$356M loan in September 2023 to finance part of Phase 1 of its project, encompassing the first three LNG trains.
In his rebuttal of the court injunction on development at Rio Grande LNG, NextDecade’s chief executive called the decision "far-reaching" in its implications and said the ruling, if upheld, would set a precedent with the potential "to impact the viability of all federally permitted infrastructure projects," citing difficulties for developers in attracting capital investments ahead of iron-clad permits.
In recent investor updates, NextDecade has targeted a commercial start-up in 2027 for its Rio Grande LNG export facility.
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