Page 4 - Euroil Week 43 2020

EurOil COMMENTARY EurOil

Engie stalls $7bn US LNG deal

after government pressure

France’s Engie has reportedly delayed signing a $7bn contract to buy US LNG from

NextDecade following pressure from the French government

FRANCE FRANCE’S Engie has reportedly delayed sign- The gas would have come from NextDecade’s
ing a $7bn contract to buy US LNG, after pres- planned Rio Grande terminal in Texas. Nex-
WHAT: sure from the French government to seek cleaner tDecade was hoping to take a final investment
Engie has reportedly supplies. But the US government also plans to decision (FID) on the first of the 27mn tonne per
delayed signing a intervene, to convince French officials to let the year (tpy) project’s several phases this year, but
contract to buy US LNG deal go ahead. pushed the move back until 2021. It is looking to
from NextDecade. Having outlawed hydraulic fracturing at finalise contracts for at least 11mn tpy of offtake
home, France for years has been looking at ways before giving the venture the green light.
WHY: of banning the import of gas from overseas According to Politico, the French govern-
The French government is fields where the unconventional technique is ment’s main concern is the life cycle of the meth-
thought to be concerned used as well. France’s government, a minority ane content of US gas produced in West Texas
about emissions from the shareholder in Engie, stepped in last month to and New Mexico. But the US government plans
feedstock gas that would prevent the company from agreeing a 20-year to get involved, the news agency has said, with
be used at NextDecade’s contract with US LNG developer NextDecade, Secretary of State Mike Pompeo leading a dip-
export terminal. Politico, Bloomberg and various other outlets lomatic push to convince France to change its
have reported. mind.
WHAT NEXT: US gas exports can help countries that rely
NextDecade aims to Political pressure on coal or oil to reduce their emissions, the US
make its facility carbon Government officials put pressure on Engie after Department of Energy (DoE) has said.
neutral if it proceeds with a meeting with environmental group Friends of “It is short-sighted and narrow-minded to
construction. the Earth, Politico said. delay LNG projects for political posturing and
“It could still be signed in the coming weeks,” hinder the environmental progress we’ve made
the lobby group told Politico. “But what is sure is using American natural gas, especially if coun-
the political, reputational risk around the valida- tries like France hope to meet their own cli-
tion of the contracts is one of the elements there. mate goals,” a spokesperson for the US Energy
The climate impact played a key role.” Department told Politico.

P4 www. NEWSBASE .com Week 43 29•October•2020