NextDecade announced that it has completed an evaluation of the Galveston Bay LNG project’s site and determined that the site in Texas City is not suitable for development of an LNG facility and related infrastructure and utilities. “NextDecade has elected to forfeit the Galveston Bay LNG site and will no longer make lease payments to the site’s landholders, the Texas General Land Office and the City of Texas City.”
The US Army Corps of Engineers (USACE), Galveston District, has advised that a portion of the Galveston Bay LNG site is under Federal Navigation Servitude and serves as an active Dredged Material Placement Area (DMPA) for the Texas City Ship Channel Federal Project, NextDecade has remarked in its statement, adding that “the Galveston Bay LNG project cannot be constructed without USACE requesting that Congress - via the Water Resources Development Act or other legislation - authorize the release of its constitutional right of Navigation Servitude over this DMPA.”
NextDecade has informed the Federal Energy Regulatory Commission (FERC) of its intent to withdraw Galveston Bay LNG from FERC pre-filing proceedings and cease all related activities as it has also requested that the US DOE terminate its June 2018 authorization for export of LNG from Galveston Bay LNG.
The operator has reminded that its decision on the 16.5 MMT/Y Galveston project has no impact on development of the company’s proposed 27 MMT/Y Rio Grande LNG export facility in Brownsville, in South Texas. “Since 2015, NextDecade’s development activities have been acutely focused on delivering Rio Grande LNG and developing the largest LNG export solution linking Permian Basin and Eagle Ford Shale natural gas to the rapidly tightening global LNG market.”
NextDecade added that it continues to work on remaining commercial agreements needed to achieve a final investment decision (FID) on the Rio Grande LNG project in 2021.
According to the Global LNG Database®, the FID on the Rio Grande LNG project has been delayed several times, as the company has not yet concluded long-term supply deals needed to support the project’s financing. “Last year, NextDecade warned investors that market disruptions from the coronavirus pandemic could further delay a final investment decision for its Rio Grande LNG export project and harm the developer's ability to sustain its operations.”