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NextDecade's Rio Grande LNG export project passes environmental review

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NextDecade's Rio Grande LNG export project passes environmental review

NextDecade Corp.'s proposed liquefied natural gas plant and related pipeline projects in Texas cleared an environmental review by the Federal Energy Regulatory Commission, advancing the export venture toward a final investment decision.

A draft environmental impact statement FERC staff issued Oct. 12 found the export projects would do some harm to the environment, "but these impacts would be reduced to less-than-significant levels" by mitigation measures.

"This milestone brings us one step closer to achieving a final investment decision on the Rio Grande LNG project, to creating thousands of jobs in the Rio Grande Valley and communities throughout the state of Texas, and to delivering reliable energy solutions to our customers around the world," NextDecade President and CEO Matt Schatzman said in a statement.

The Rio Grande LNG terminal in Brownsville, Texas, would include six liquefaction trains capable of producing 27 million tonnes per annum of LNG. Rio Grande LNG LLC and an affiliate applied for a Natural Gas Act certificate for the terminal and related pipeline projects in May 2016.

Supplies are expected to come from the Permian Basin and Eagle Ford shale plays via the 4.5 Bcf/d Rio Bravo pipeline, which would run from the Agua Dulce, Texas, area to the Rio Grande facility.

FERC staff said the Rio Grande project, combined with other projects within the area, "would result in certain significant cumulative impacts." That could be a factor in any FERC decision on the projects, which include two other proposed LNG export ventures: Exelon Corp.'s Annova LNG facility and Texas LNG LLC's Brownsville terminal.

"Once one in the area can prove that they can operate and meet the requirements from FERC, they tend to look at that …" Charlie Riedl, executive director of the Center for Liquefied Natural Gas. "From an [environmental impact statement] standpoint, I think that you'll see a similar sort of response and approval. I don't think that they will cause delays. But until they do issue drafts, it's hard to tell."

NextDecade spokeswoman Ashley Helmer said the company expected to stay on the project timeline, with a final environmental impact statement on April 26, 2019, and an expected final investment decision in the third quarter of 2019.

A comment period on the document closes Dec. 3. FERC will consider the staff's recommendations when decides whether to authorize the projects.

The anticipated cumulative impacts "are predominately based on concurrent construction and operation" of the three LNG plants, FERC staff reported. The impacts were primarily associated with construction on the Brownsville Ship Channel, construction vehicle traffic, "potential direct impacts on the federally listed ocelot and jaguarundi," and construction noise in sensitive areas.

In terms of operation, the primary cumulative impacts include marine vessel impacts on water quality and on existing traffic in the channel, along with harm to vegetation that is habitat for federally listed species, FERC staff said.

Texas LNG COO Langtry Meyer said in an email that the company expects a draft environmental impact statement for its up to 4-mtpa export venture and that will cover cumulative impacts. FERC estimated it would release the environmental review for Texas LNG in October.

"Texas LNG is the smallest of the three proposed Brownsville LNG projects and should have the smallest contribution to cumulative impacts," Meyer said.

FERC recently announced updated schedules for environmental reviews of LNG terminals, along with steps to make the commission's processing of these types of applications more efficient. The Rio Grande project was one of the 12 projects covered by the notice. (FERC dockets CP16-454, CP16-455)

FERC's updated review schedules suggested Annova LNG would receive its environmental review in December. (FERC docket CP16-480)