Plans to install an FSRU at Cork in Ireland have been shelved after a preliminary deal signed in 2017 with US LNG developer NextDecade expired.
The FSRU was originally planned to cater for up to 3 mill tonnes per year of LNG from NextDecade's proposed Rio Grande LNG export terminal in Texas.
When the memorandum of understanding was signed with the Irish port, NextDecade said it was in discussions with European energy companies to enter into long-term purchase contracts to deliver LNG to Cork.
Since then, NextDecade has pushed Rio Grande LNG's schedule back several times amid the challenges of securing long-term supply contracts, most recently in May, 2020 when it said a final investment decision (FID) would occur in 2021.
Then, in November, 2020, France's Engie stopped talks over a potential long-term supply agreement with NextDecade, amid pressure not to import LNG produced from shale gas.
NextDecade claimed that its commercial efforts are being boosted by the recent price strength in international markets and as a result, the developer maintained its current 2021 FID target.
"Selling the gas is still the biggest variable," said Michael Webber, Managing Partner of investment research firm, Webber Research & Advisory, talking with S&P Platts. "Maybe Cork could have topped off the commercialisation process, but it was never going to be an anchor. They still need to build the book. Cork would have been icing on the cake."
On 14th January, Ireland's Environment Minister, Eamon Ryan, said the Port of Cork had ruled out pursuing the LNG import terminal.
"Due to the increased uncertainty in Ireland's evolving policies regarding the importation of LNG, NextDecade has elected to suspend development activities related to the Inisfree FSRU project in the Port of Cork," Patrick Hughes, NextDecade’s Senior Vice President of Strategy and Business Development, told S&P Global Platts when asked.
The move is the latest setback for the prospect of LNG supplies to Ireland after the new Irish government last year opposed the import of LNG based on fracked natural gas from the US.
In response to a parliamentary question on the status of the project - one of three planned LNG import facilities in Ireland - Ryan said: "The Port of Cork has advised that the MOU expired on 31st December and that they have no intention to renew it."
NextDecade said it continued to focus its activities on the Rio Grande LNG project.
"The price strength we are seeing in the global LNG market from Asia to Europe confirms our longstanding views that the market is tightening and with only approximately 8 mill tonnes per annum of additional LNG capacity to be added annually from 2021 and 2024, we expect the market to further tighten," Hughes added. "The world needs substantially more LNG and NextDecade's Rio Grande LNG project is well-positioned to help solve this growing problem."
In addition to the Cork FSRU project, there are currently two other proposed LNG import projects in Ireland, Platts said.
The planned 5 bill cu m per year Shannon LNG terminal also suffered a major setback in November when the Irish High Court ruled to cancel all development consents for the project.
The final project under development is UK-listed Predator Oil & Gas' plans for an FSRU, which the company has claimed would "not use shale gas as an LNG feedstock."