NextDecade may delay FID on Rio Grande LNG

NextDecade Corporation has warned that the COVID-19 pandemic and volatility in the energy markets may adversely affect its business, including efforts to reach a final investment decision (FID) on its 27-million tonne/year (tpy) Rio Grande LNG liquefaction plant in Brownsville, Texas.

Prospects for development and financing of the plant are based in part on factors including global economic conditions that have been, and are likely to continue to be, adversely affected by the pandemic, the company said in a US Securities Exchange Commission filing.

The company said it has modified its business practices, including a variety of steps to implement social distancing, but cautioned that there was no certainty that such measures will be sufficient to mitigate the risks posed by COVID-19 or otherwise be satisfactory to government authorities.

NextDecade also noted that a sustained disruption in the capital markets from the COVID-19 pandemic, specifically with respect to the energy industry, could negatively impact its ability to raise capital.

Other mentioned risks include doing business in foreign countries, obtaining government approvals, and exported LNG remaining a competitive source of energy in international markets.

NextDecade had planned to take FID in 2020 to meet an in-service target of 2023. The company in February 2020 received US Department of Energy authorization to export LNG from Rio Grande to non-free trade agreement countries.

Earlier this month Sempra Energy delayed FID on its 13.5-million tpy Port Arthur LNG liquefaction plant from third-quarter 2020 to 2021 due to current market dynamics.

Source: Oil & Gas Journal