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Rio Grande LNG seeks FERC nod to add carbon capture to project

Highlights

Says plan trims emissions at least 90% from earlier proposal

Contends plan enables quick FERC finding on climate impacts

NextDecade LNG has pitched a limited amendment to its federal authorization for the Rio Grande LNG terminal that would allow it to voluntarily capture and store CO2 produced at the terminal.

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The change should allow the Federal Energy Regulatory Commission to "expeditiously find that the RGLNG Terminal's contribution to global climate change with CCS systems operating would not be significant," Rio Grande said in an application filed Nov. 17 (CP22-17).

The proposal comes as the US Court of Appeals for the District of Columbia Circuit has found fault with the original FERC authorization for the Brownsville, Texas, project, remanding FERC's orders to the commission without vacating them.

The court's Aug. 3 decision found FERC failed to adequately assess the impact of the projects' greenhouse gas emissions because the commission neglected to answer arguments that it must use the social cost of carbon or some other generally accepted method to assess the effects. The panel also found FERC's environmental justice analysis for the project to be flawed.

In its new, limited application, Rio Grande LNG said deploying CCS systems at the terminal will allow Rio Grande LNG to capture and store at least 90% of CO2 emissions that would have been emitted during commercial operation of the previously approved terminal -- removing CO2 from both the feed gas and the exhaust flue gas.

It asserted the CCS deployment potentially would result in a CO2 equivalent emissions increase from operations of the terminal of 0.0001% at the national level, based on 2019 levels. That is down from estimates of an 0.17% increase at the national level, based on 2017 levels, contemplated in the originally approved authorization orders, the application said.

"Through this limited amendment, RGLNG seeks to answer the call for increased incorporation of CCS technology in the natural gas sector, and become an industry leader in producing greener LNG," the application said. As for environmental justice concerns, Rio Grande said the lowered emissions would also "naturally result in an immediate reduction in the project's already minor impacts on local environmental justice communities in south Texas."

Pointing to its efforts to start construction of the LNG terminal early in 2022, it sought expedited consideration of the CCS systems to enable construction of those facilities "soon thereafter."

Carbon capture developments

NextDecade in March announced that it had launched the carbon capture project tied to the proposed terminal. At the time, it agreed to sell preferred stock to a group of investment firms to help advance the carbon capture project, as well as finalize commercial agreements needed to be able to sanction the up to 27 million mt/year export terminal later this year. NextDecade previously has estimated the all-in cost of the carbon capture project, including permanent storage, to be $63-$74/mt of CO2, before any benefit from US tax credits.

The efforts to curtail CO2 emissions arise as overseas LNG buyers, especially in Europe, have scrutinized how purchases of US shale gas could impact their emissions reduction goals.

Once captured, Rio Grande LNG told FERC the CO2 will be shipped via pipeline to an underground geologic formation that would be permitted by the Environmental Protection Agency as well as Texas regulators. The company said it has begun characterizing favorable storage sites under EPA guidelines.

Any pipeline needed to ship the CO2 to a sequestration site will be subject to jurisdiction of Texas agencies, rather than FERC, it added.

The CCS system will entail flue gas cooling, a CO2 absorber, an amine regenerator and reboiler, CO2 dehydration, CO2 compression and a water heat recovery unit and distribution, according to the FERC application.

The company also noted that NextDecade and subsidiaries have formed a joint project with Project Canary for monitoring, reporting and independent third-party certification of the GHG intensity of the LNG.