Page 12 - EurOil Week 18 2022

EurOil PROJECTS & COMPANIES EurOil

NextDecade strikes offtake

deal with Engie at last

US-FRANCE 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 in Ukraine.
purchase agreement (SPA), Engie will buy The US responded to the EU’s pivot on energy
1.75mn tonnes per year (tpy) from NextDec- policy by pledging to increase supplies of LNG to
ade’s Rio Grande LNG terminal in Texas over European countries by an additional 1.8 trillion
a 15-year period. Shipments under the free- cubic feet (50bn cubic metres) per year by 2030. Last year as
on-board (FOB) arrangement are anticipated (See: EU softens stance on long-term LNG supply
to begin in 2026, when Rio Grande enters deals, page 6) This will depend on companies demand was
service. striking supply deals, and it seems that they are
NextDecade is targeting a final investment already making moves to advance this. picking up, Engie
decision (FID) on a minimum of two trains Engie’s initial misgivings over buying LNG
at Rio Grande for the second half of this year, from Rio Grande came despite NextDecade’s quietly struck a
though it noted this week that this depends pledge to cut carbon dioxide (CO2) emissions deal with another
on further contracting and financing being from the project by at least 90%, primarily via
achieved. FIDs on the remaining three trains will carbon capture and storage (CCS). The US com- US LNG producer,
then follow, with Rio Grande LNG set to have an pany intends to develop a CCS facility alongside
eventual capacity of 27mn tpy. the liquefaction capacity at Rio Grande once it Cheniere Energy.
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 Next-
fracking. Decade’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.”™

P12 www. NEWSBASE .com Week 18 04•May•2022