Page 6 - GLNG Week 12 2023

GLNG COMMENTARY GLNG

Rio Grande LNG suffers another

setback with Societe General

withdrawal

The bank has cited its climate commitments.

USA FRENCH bank Societe General revealed on Energy to run through to June 15.
March 28 that it pulled out of NextDecade’s Rio The project, which is situated on a 984-acre
WHAT: Grande LNG project in Texas last year. It marks site and will be the largest privately funded infra-
Rio Grande LNG has the first time the financial institution has dis- structure project in Texas, is being developed in
faced numerous delays closed that it withdrew from the long-delayed multiple stages.
and now it has been LNG facility to be developed in the Port of
revealed that lead bank Brownsville. Increasing environmental regulation
Societe General pulled Without referencing the decision on Rio Now more than ever before, banks and finan-
out of the project last Grande LNG, a Societe General representative cial institutions around the world are coming
year, possibly explaining speaking with Reuters highlighted the bank’s under pressure from activists and shareholders
why the project has failed climate commitments, which include ending all to do more to combat climate change. Begin-
to move ahead. LNG financing where the facility is not aligned ning in 2017, a coalition of protest groups in
with Societe General’s human rights and envi- both France and the US campaigned against
WHY: ronmental, social, and governance (ESG) goals. Societe General.
Climate commitments are In 2021, the bank announced it was com- A mobilisation campaign was also conducted
believed to be behind the mitted to stopping financing American LNG in France beginning the same year to pressure
bank’s decision to pull projects with the exception of its pre-existing BNP Paribas to exit from its advisory mandate
out of the project. The support for Rio Grande LNG, which NextDec- for the nearby Texas LNG project in the Rio
bank has committed to ade says offers carbon emissions reduction of Grande valley. The French bank responded
ending all LNG financing over 90% through planned carbon capture and by agreeing to no longer directly finance LNG
where projects are not storage that will capture and permanently store exports from shale or oil from tar sands.
aligned with its human over 5mn tonnes of carbon dioxide per year. Another nearby project, Annova LNG
rights and environmental, The announcement by Societe General could announced in March 2021 that it was cancelling
social, and governance help explain why NextDecade’s Rio Grande LNG its proposed 6.5mn tpy LNG facility. Majority
goals. terminal, which is planned to have five liquefac- owner Exelon Corporation cited changes to the
tion trains and a nameplate capacity of 27mn global LNG market, which at the time had wit-
WHAT NEXT: tonnes per year (tpy) of low carbon intensive nessed sluggish demand caused by the Covid-19
Developers of LNG LNG, has struggled to move ahead. pandemic. Nevertheless, the project did also face
projects must Previous timelines had called for a Final stiff opposition from environmentalists who
increasingly prepare Investment Decision (FID) to be made by March criticized potential carbon emissions as well as
for more stringent 31, however, earlier this month, the company potential endangerment of the habitats of jagua-
environmental regulation revealed it is now expecting an FID to be taken rundis and ocelots.
as pressure mounts by the end of the second quarter. North of the border in Canada, the province
from governments, Upstream reports that the firm completed an of British Columbia announced a greenhouse
environmentalists and 8-K filing with the US Securities and Exchange gas emission control framework in March. As
investors to tackle Commission (SEC) to extend the price valid- part of the framework’s requirements all LNG
climate change. ity of its construction agreement with Bechtel projects proposed in the province must include

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