Page 10 - GLNG Week 18 2022

GLNG AMERICAS GLNG

NextDecade strikes offtake deal

with Engie at last

SUPPLY US LNG developer NextDecade has reached an was picking up, Engie quietly struck a deal with
agreement this week to supply LNG to French another US LNG producer, Cheniere Energy.
utility Engie. The deal signals a change in course The volume and duration of that deal was sub-
for Engie, which had previously backed out sequently expanded in March this year, as the
of talks over a supply deal with NextDecade, European Union embarked on an urgent push
reportedly on environmental concerns. to phase out Russian gas in the wake of the war
Under the newly announced sale and pur- in Ukraine.
chase agreement (SPA), Engie will buy 1.75mn The US responded to the EU’s pivot on energy
tonnes per year (tpy) from NextDecade’s Rio policy by pledging to increase supplies of LNG to
Grande LNG terminal in Texas over a 15-year European countries by an additional 1.8 trillion
period. Shipments under the free-on-board cubic feet (50bn cubic metres) per year by 2030.
(FOB) arrangement are anticipated to begin in This will depend on companies striking supply
2026, when Rio Grande enters service. deals, and it seems that they are already making
NextDecade is targeting a final investment moves to advance this.
decision (FID) on a minimum of two trains at Rio Engie’s initial misgivings over buying LNG
Grande for the second half of this year, though it from Rio Grande came despite NextDecade’s
noted this week that this depends on further con- pledge to cut carbon dioxide (CO2) emissions
tracting and financing being achieved. FIDs on from the project by at least 90%, primarily via
the remaining three trains will then follow, with carbon capture and storage (CCS). The US com-
Rio Grande LNG set to have an eventual capacity pany intends to develop a CCS facility alongside
of 27mn tpy. the liquefaction capacity at Rio Grande once it
Engie previously abandoned talks over a kicks off construction and has continued to tout
potential $7bn, 20-year contract to buy LNG its environmental credentials.
from Rio Grande in 2020. It was reported at the “The signing of this SPA is an important step
time that it had come under pressure from the in showing our commitment in the areas of envi-
French government as feedstock for US LNG ronmental stewardship, social responsibility and
comes from shale gas, which is produced using governance best practices, while upholding the
hydraulic fracturing, commonly known as LNG industry’s highest standards,” stated Nex-
fracking. tDecade’s chairman and CEO, Matt Schatzman.
France banned fracking in 2011 and had “It also shows how we can help meet our buyers’
appeared to be keen to apply similar standards to climate change initiatives, while providing them
imported energy. However, last year as demand access to secure energy supply.” ™

P10 www. NEWSBASE .com Week 18 06•May•2022