NextDecade hit by Engie pullout

Thursday, 29 October 2020
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French energy giant Engie has delayed its decision on a $7 bill deal to import US LNG, following pressure from the government to seek cleaner fuel supplies.

Engie said it had postponed work on a contract to take LNG from NextDecade Corp’s facility, which is fed by shale gas fields using fracking technology.

The contract was due to run through 2045 and it was seen as key to the construction of the US firm’s Rio Grande LNG export terminal in Texas, according to the pressure group Les Amis de la Terre, reported Bloomberg.

Engie’s board will now consider a potential contract with NextDecade at a later date, as it needs a ‘deeper’ examination, said a spokesperson for the utility, declining to elaborate on the postponement to Bloomberg.

Natural gas is increasingly being targeted by environmental pressure groups and governments for its contribution to climate-damaging greenhouse gases.

Earlier this month, environmental group Les Amis de la Terre France urged Engie not to sign the contract with NextDecade, blaming US shale gas for environmental and sanitary disasters.

The French Government owns a 23.6% stake in Engie and has asked the company not to sign the contract due to pollution concerns, Bloomberg said, quoting local sources.

France is one of the first countries to adopt a law that aims to make its economy carbon neutral by 2050 to fight climate change amid growing concerns among voters.

President Macron was among European Union leaders who this month had called for a faster emissions cut by 2030 than already planned.

US President Trump had persuaded countries, including Germany and Poland, to take more LNG cargoes from America to counter the larger volumes of gas arriving in Europe from Russia.

It was also alleged that Trump’s administration put pressure on European companies to abandon the construction of the Nord Stream 2 gas pipeline from Russia, which is partly financed by Engie.

A NextDecade official said in a response to a request for comment from Bloomberg that the company is talking with a number of potential partners worldwide, without naming them.

NextDecade still needs to sign long-term contracts to underpin the final investment decision (FID) for Rio Grande LNG, Senior Vice President, James MacTaggart said late last month. 

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