BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
LNG | Natural Gas

NextDecade revises timeline for reaching final investment decision on LNG terminal

LNG

As US liquefaction projects come online, lower European and Asian prices are possible

Natural Gas

Platts Inside FERC Bidweek Watch

Commodities | Energy | Electric Power | Emissions | Renewables | Natural Gas | Natural Gas (North American)

Northeast Power and Gas Markets Conference, 14th Annual

Natural Gas | Oil | Crude Oil

La argentina YPF anticipa un crecimiento constante de la producción de petróleo en Vaca Muerta

NextDecade revises timeline for reaching final investment decision on LNG terminal

Highlights

FID for Rio Grande LNG now expected in Q4

Developer tries to secure further offtake deals

Houston — NextDecade delayed by as many as three months when it expects to make a final investment decision on its proposed Rio Grande LNG export project in Brownsville, Texas, a revised time line included in an investor presentation posted on the developer's website said Tuesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The up to 27 million mt/year terminal to be sited along the Gulf of Mexico is among a handful of US liquefaction projects that are being closely watched by the market to determine what the global supply picture will look like during the early to mid-2020s.

NextDecade notched its first offtake contract when it announced in April a 20-year agreement with Royal Dutch Shell for 2 million mt/year of LNG. At the time, it maintained its expectation of an FID on up to three liquefaction trains, representing a total capacity of about 13.5 million mt/year by the end of the third quarter in September. In May, it tweaked its guidance by saying it anticipated FID as early as the end of the Q3. Its new presentation said a decision whether to advance the project would come in the Q4, which ends in December.

"We do not expect this to impact the startup date of Rio Grande LNG," spokeswoman Toni Beck said in an email responding to questions.

NextDecade remains in ongoing commercial talks with multiple potential LNG buyers to secure sufficient contracts to reach FID, the presentation said. It expects to receive its Federal Energy Regulatory Commission permit certificate later this quarter, and is targeting a 2023 startup.

With the US currently responsible for much of the new liquefaction capacity growth worldwide and China responsible for much of the new LNG demand growth, developers of the second wave of American projects have been aggressively courting Chinese buyers for long-term contracts to support their facilities. But the protracted trade war between the two countries has effectively cut off those prospects for now. No spot US LNG cargoes have been delivered to China since March, and counterparties in China have been waiting for a resolution before signing new long-term deals.

Developers have been looking to end-users elsewhere in Asia and in Europe, as well as to global commodity traders that are expanding their LNG portfolios, to pick up the slack in the meantime.

NextDecade has been pitching its proximity to stable supplies of cheap feedgas from the Permian and other shale basins, as well as its willingness to offer flexibility in pricing mechanisms used for contracts. Three-quarters of the Shell offtake agreement will be indexed to Brent, with the rest indexed to US gas prices, including Henry Hub.

S&P Global Platts European Gas & LNG Summit | September 23-24, 2019 | Amsterdam

In its 13th year, this key fixture in the European Gas industry’s calendar will provide a platform for the region’s leading gas producers and market participants to meet, discuss and debate the future for the European gas market.

Find out more

Traditionally, LNG offtake agreements were indexed to the global crude benchmark. Cheniere Energy, the biggest US exporter of LNG, has shown a preference for Henry Hub-linked contracts, while Tellurian, a second-wave export developer like NextDecade, has been pursuing contracts tied to Platts JKM, the benchmark price for spot-traded LNG in Northeast Asia.

LNG netbacks to the US Henry Hub from premium international markets have decreased dramatically this year. While Chinese demand has picked up in recent months from levels earlier in the year, demand in Japan remains weaker than normal because of increased nuclear use.

Rio Grande LNG is one of three LNG export projects actively being pursued at the underutilized Brownsville port. Texas LNG and Exelon-backed Annova LNG are developing the other two.

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com