Page 4 - EurOil Week 03 2021

EurOil COMMENTARY EurOil

NextDecade deal for Irish

LNG supply falls through

Doubts about the project have been growing

for years, amid Irish authorities’ mounting

aversion to fossil fuels

IRELAND PROSPECTS for Irish LNG imports have share of its gas from the UK. Decommission-
dimmed further after a preliminary deal with ing began in November last year at the Kinsale
WHAT: US exporter NextDecade on plans for a floating fields, once the bedrock of Ireland’s domestic gas
NextDecade’s preliminary storage and regasification unit (FSRU) in Cork supply.
deal to provide Ireland expired at the end of last year. The Irish oil and gas industry has criticised
with an FSRU has expired. NextDecade agreed a memorandum of the current policy direction, warning it will leave
understanding (MoU) with the Cork port the country more dependent on energy imports.
WHY: authorities in 2017 on establishing an inlet for Not only will this increase costs and pose a risk to
Irish LNG projects face LNG supplies in Ireland, whose own gas supply energy security, but Ireland will also be contrib-
an uphill struggle amid is dwindling, leaving it more reliant on imports uting to greater emissions because of the longer
mounting opposition to from the UK. But doubts about the project have distance that gas supplies must travel to reach
fossil fuels. been growing for years, amid Irish authorities’ consumers.
mounting aversion to fossil fuels. NextDecade was due to supply gas to Cork
WHAT NEXT: “Due to the increased uncertainty in Ireland’s from its planned 27mn tonne per year (tpy) Rio
NextDecade plans to evolving policies regarding the importation of Grande LNG complex in Texas. But the company
make its Rio Grande LNG LNG, NextDecade has elected to suspend devel- insists that the setback at Cork will not affect its
terminal carbon neutral opment activities,” the US exporter said in an ability to take a final investment decision (FID)
to appease climate email statement last week. on developing the first two of Rio Grande’s five
conscious buyers. trains. The company says it is still on track to take
Ireland takes aim at gas this step this year.
The 4bn cubic metre per year Cork terminal Like many LNG exporters, NextDecade is
is the second planned LNG import project having to navigate increasing environmental
in Ireland to be axed. The country’s coalition concerns among customers. France’s Engie
government, established last summer and pulled out of talks in November to buy LNG
consisting of 12 Green Party members, later from Rio Grande after environmentalists put
withdrew the 5 bcm per year Shannon LNG pressure on the French government. According
import facility from a shortlist of projects eli- to reports, the government’s main concern was
gible for EU grants. The fate of that project also the life cycle of the methane content of gas pro-
looks sealed, after the High Court in Ireland in duced in West Texas and New Mexico.
November ruled to annul all its development NextDecade was also hoping to deliver gas to
consents. the Shannon LNG terminal.
The UK’s Predator Oil & Gas is also advanc- The US exporter has responded to the chang-
ing an FSRU project in Ireland but has insisted ing considerations of its would-be buyers by
it will not take shale gas supply because of the announcing plans in October last year to make
latter’s environmental impact. Rio Grande operate with net-zero emissions.
In addition to blocking LNG imports, the Reductions will mainly be achieved using car-
Irish government has also taken aim at domestic bon, capture and storage (CCS) technology, it
gas supply. It vowed in July last year to stop issu- said.
ing any new licences for gas exploration and pro- “We are targeting carbon neutrality at Rio
duction. That followed the former government’s Grande LNG with the use of carbon capture and
2019 ban on issuing new oil licences. storage,” NextDecade said in its statement. “And
Ireland covers over half of its gas needs with we believe that, in partnership with certain US
supply from the Corrib gas field and several producers who supply gas to Rio Grande LNG,
smaller deposits. But these fields have been we will be able to supply our customers LNG
producing for decades and are now mature. As with some of the lowest greenhouse gas [GHG]
a result, Ireland has been getting an increasing intensity.” ™

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