Engie Delays South Texas LNG Supply Deal Over Emissions Concerns
Engie’s delayed supply contract with NextDecade’s Rio Grande LNG project is for 20 years. FID on the project is expected in 2021.
Engie delayed its decision to sign a 20-year, $7-billion supply contract with NextDecade’s 27-mtpa Rio Grande LNG (RGLNG) project in Brownsville, Texas, following emission concerns from the French government.
France has a 23.6% stake in Engie, which informed Reuters its board decided on 30 September it would give itself more time to study the contract, which “required a more detailed examination”.
The supply deal would run until 2045, with exports expected in 2026.
NextDecade did not address the matter, but already has plans in place to reduce emissions.
The company said in July the project would utilize five LNG trains instead of its original plan for six. Earlier this month, it said it developed proprietary processes to reduce emissions by approximately 90% and was exploring options to address the remaining emissions to enable the project to achieve carbon-neutrality.
RGLNG also has a 2-mtpa, 20-year sale-and-purchase agreement with Shell. Final investment decision on the RGLNG project is expected in 2021.