Washington — NextDecade's proposed 27 million mt/year Rio Grande LNG terminal drew support from a top US Department of Energy official, who on Wednesday emphasized the project's potential role in keeping Permian Basin production levels going.

The high-level attention reflects the Trump administration's continuing push to advance LNG terminals as part of a broader strategy to encourage US oil and gas production and exports.

DOE Deputy Secretary Dan Brouillette traveled to Brownsville, Texas, Wednesday to participate in a signing ceremony for an agreement in which NextDecade will help fund the deepening of the Brownsville Ship Channel from the Gulf of Mexico to the Rio Grand LNG terminal site, as well as widening one section.

In remarks delivered there, Brouillette tied the project to the administration's effort to encourage energy infrastructure development throughout the country.

In an interview, he called the Rio Grande project "particularly interesting and important for us because as we look at the Permian Basin and the increased production coming out of there, if we're not able to move some of the gas that's being developed out of Permian Basin, at some point you're going to start to affect oil production as well."

PIPELINE TO AGUA DULCE

In addition to the LNG terminal, NextDecade plans the related Rio Bravo Pipeline, comprising twin 42-inch pipelines that would run 137.5 miles from Agua Dulce to Brownsville, Texas. At Agua Dulce, it would connect to existing pipeline networks linking to the Eagle Ford and Permian shale basins.

Brouillette added the Rio Grande project is "particularly close" to a final investment decision. NextDecade has said it anticipates FID by the end of the third quarter of 2019.

"If they're successful in doing that, it will bring a tremendous amount of US LNG to market and will also allow us to continue with extraordinary oil production numbers that we're seeing out of Texas," he said.

FERC ACTION

The Federal Energy Regulatory Commission, which has authority to authorize the LNG terminal and pipeline, was scheduled to issue a final environmental impact statement for the project on Friday.

At DOE, Brouillette said there has been an emphasis upon acting as quickly as possible on export applications associated with major LNG projects after FERC completes its process. In addition, he said, DOE will be seeking ways to streamline its processes, he said.

Separately, Brouillette somewhat downplayed a report that the White House was debating a decision on a waiver of Jones Act restrictions to allow for LNG from US export facilities using non-US flagged vessels, in order to meet generation needs of Puerto Rico or to ease gas system constraints during winter peak demand in New England.

"These topics come up from time to time as a matter of routine," he said. "It's really because the president has directed all of us at the agencies toward an all-of-the-above energy strategy," and to look at all options to get that energy to market. "The fact that we can't get natural gas to the Northeast as easily as the president would like us to do that means that we have to find solutions," he said.

-- Maya Weber, maya.weber@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com