Page 9 - GLNG Week 43 2020

GLNG COMMENTARY GLNG

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

POLICY FRANCE’S Engie has reportedly delayed sign- NextDecade was hoping to take a final invest-
ing a $7bn contract to buy US LNG, after pres- ment decision (FID) on the first of the 27mn
WHAT: sure from the French government to seek cleaner tonne per year (tpy) project’s several phases this
Engie has reportedly supplies. But the US government also plans to year, but pushed the move back until 2021. It is
delayed signing a intervene, to convince French officials to let the looking to finalise contracts for at least 11mn tpy
contract to buy US LNG deal go ahead. of offtake before giving the venture the green
from NextDecade. Having outlawed hydraulic fracturing at light.
home, France for years has been looking at ways According to Politico, the French govern-
WHY: of banning the import of gas from overseas ment’s main concern is the life cycle of the
The French government is fields where the unconventional technique is methane content of US gas produced in West
thought to be concerned used as well. France’s government, a minority Texas and New Mexico. But the US government
about emissions from the shareholder in Engie, stepped in last month to plans to get involved, the news agency has said,
feedstock gas that would prevent the company from agreeing a 20-year with Secretary of State Mike Pompeo leading a
be used at NextDecade’s contract with US LNG developer NextDecade, diplomatic push to convince France to change
export terminal. Politico, Bloomberg and various other outlets its mind.
have reported. US gas exports can help countries that rely
WHAT NEXT: on coal or oil to reduce their emissions, the US
NextDecade aims to Political pressure Department of Energy (DoE) has said.
make its facility carbon Government officials put pressure on Engie after “It is short-sighted and narrow-minded to
neutral if it proceeds with a meeting with environmental group Friends of delay LNG projects for political posturing and
construction. the Earth, Politico said. hinder the environmental progress we’ve made
“It could still be signed in the coming weeks,” using American natural gas, especially if coun-
the lobby group told Politico. “But what is sure tries like France hope to meet their own cli-
is the political, reputational risk around the val- mate goals,” a spokesperson for the US Energy
idation of the contracts is one of the elements Department told Politico.
there. The climate impact played a key role.” This line of reasoning may not be valid for
The gas would have come from NextDec- France, however, whose energy mix is domi-
ade’s planned Rio Grande terminal in Texas. nated by nuclear power and renewables. Coal

The French
government’s main
concern is reportedly
the life cycle of the
methane content of US
gas produced in West
Texas and New Mexico.

Week 43 30•October•2020 www. NEWSBASE .com P9