NextDecade Drops Galveston LNG Plans
US LNG developer NextDecade has axed plans for a liquefaction terminal at Galveston Bay in Texas, it reported on January 29, concluding that the project site is unsuitable.
NextDecade's main focus is the 27mn metric ton/year Rio Grande project in Texas. It expects to take a final investment decision on that scheme this year, after delaying the move because of difficulties securing customers. The decision on Galveston Bay has no bearing on Rio Grande, the company said.
NextDecade unveiled plans for a second terminal at Galveston Bay in 2018, looking to capitalise on a projected boom in gas production in the region. It was to consist of three 5.5mn mt/yr liquefaction trains, four 200,000-m3 LNG storage tanks and truck and marine vessel loading facilities. Its gas was to be delivered via a 137-km pipeline from the Katy gas hub.
In a statement, though, NextDecade said that the US Army Corps of Engineers had advised that part of the project site was under a special navigation designation that would need to be removed by Congress. Given the "prolonged uncertainty" about whether this obstacle could be overcome, NextDecade said it had forfeited the site and would no longer make lease payments to landholders. It has also informed the Federal Energy Regulatory Commission of its decision and withdrawn all pre-filing proceedings.
"While it is unfortunate that the Galveston Bay LNG site is not viable for large-scale infrastructure development, this determination only further enhances the value of – and the need for – NextDecade’s world-class Rio Grande LNG project in the Port of Brownsville,” NextDecade CEO Matt Schatzman said. "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.”