LNG

March 15 (LNGJ) - Texas LNG, the liquefied natural gas export project to be constructed by the New York-based Glenfarne Group at the fully permitted site at the Port of Brownsville, has received sufficient “expressions of interest from leading project finance banks” to move to the execution phase of project financing. Glenfarne said it had also appointed Latham & Watkins as Borrower’s counsel and Milbank as Lenders’ counsel for the issuance.

   The firm noted that these lenders have been key supporters of Glenfarne, having led over $4 billion of financing to Glenfarne’s businesses over the last 10 years for various energy transition-focused assets. “Texas LNG’s financing consortium will be comprised of the world’s leading institutions that recognize the attributes of the project and Glenfarne’s excellent history of building energy transition infrastructure,” said Brendan Duval, Chief Executive and Founder of Glenfarne Energy Transition. The first LNG exports from Texas LNG are expected to be shipped in 2028.

A leading US meteorologist group has forecast a slightly less active US Gulf Coast and Atlantic hurricane season in 2023 but with the continued risk of temporary shut-downs of oil and gas production and LNG export facilities and project sites.

French bank Société Générale has confirmed it was no longer an advisor to US energy company NextDecade Corp’s Rio Grande liquefied natural gas export project in Texas, which is nearing a final investment decision and has signed up a top list of global buyers from the US to China.

As the project's mandated financial advisor, Société Générale had been the lead bank in preparing financing for the LNG plant before exiting the role.

NextDecade had appointed Société Générale in May 2017 along with Australia’s Macquarie Capital to act as joint financial advisors for the debt and equity financing of the Rio Grande project at the port of Brownsville.

Société Générale and Macquarie have each played extensive roles in advising and participating in debt and equity financing for large-scale infrastructure and LNG projects in the US and elsewhere.

Engaged since 2017

France’s SocGen had been an advisor since just before the US Rio Grande LNG project listed on the US-based Nasdaq global stock exchange in July 2017 as NextDecade.

NextDecade was then run by former Shell senior executive, the late Kathleen Eisbrenner, who had organised the listing and taken the company forward.

Without commenting on the reason for this specific exit, SocGen said that energy sector commitments were set to end all reserve-based lending to US onshore projects by the end of 2023 and to only participate in financing LNG projects aligned with the bank's engagement in policies promoting a strict Net Zero doctrine.

“At Société Générale, we believe that banks have a key role to play in the positive transformations of the world and the sustainable development of economies. In line with our corporate purpose, we have placed sustainable development - and the energy transition in particular - at the heart of our strategy,” the bank states grandly, while noting it was a founder member in 2021 of the “Net-Zero Banking Alliance”.

The Paris-based bank has pledged to commit itself to aligning its portfolios to trajectories aimed at global carbon neutrality.

The bank has said recently it was reinforcing its objective to radically reduce exposure to the oil and gas production sector by 2025.

Confirmation

NextDecade said on March 28 that Australia's Macquarie is still a financial advisor of the company along with Japan’s largest bank, Mitsubishi UFJ Financial Group, and confirmed that Société Générale ended a five-year relationship with the Houston-based company in 2022.

NextDecade earlier in March 2023 amended its engineering contract agreement with US company Bechtel Energy to extend the price validity of the engineering, procurement and construction contract for the building of the first three liquefaction Trains to June 15, 2023.

NextDecade currently estimates the aggregate lump-sum EPC cost to construct Trains 1-3 of the Rio Grande Facility at approximately $11.5 billion

The final EPC lump-sum contract pricing for Trains 1-3 of the Rio Grande facility will be determined prior to an FID being announced.

NextDecade said that it was currently targeting a positive FID on Trains 1-3 of the Rio Grande project before the end of the second quarter of 2023, with FIDs on the remaining Trains to follow later.

Environmental permits

Next Decade has ultimate plans and permits to produce up to 27 MTPA of LNG from five liquefaction Trains at the Rio Grande facility.

NextDecade signed about half a dozen sales and purchase agreements (SPAs) in 2022, the most recent being a volume increase in December with ENN LNG of Singapore, a trading unit of the Chinese ENN Natural Gas Group.

Under the 20-year SPA, ENN will now purchase 2.0 MTPA of LNG. NextDecade said this was a 500,000 tonnes per annum increase from the original 1.5 MTPA SPA announced earlier in 2022.

NextDecade earlier in December 2022 signed an SPA with Galp Trading S.A. of Portugal.

This was its fifth deal of the year and the increase of volumes for ENN Group was its sixth volume sign-up.

NextDecade has made progress with other SPAs during 2022, including one with ExxonMobil Corp.

The US major signed a 20-year supply deal with NextDecade at the end of July 2022 through its trading subsidiary in Asia.

NextDecade has also signed three supply agreement with Chinese companies, including a 20-year deal with China Gas Hongda Energy Trading Co., a wholly-owned subsidiary of China Gas Holdings, the ENN Group and with Guangdong Energy Group Natural Gas.

NextDecade Corp., the owner of the Rio Grande LNG export project near the port of Brownsville in Texas, said it had developed proprietary processes using proven technology to reduce carbon-dioxide emissions at the facility.

The US Annova liquefied natural gas export project planned for the south bank of the Brownsville Ship Channel in Texas, and whose owners include Chicago-based power company Exelon Corp., has signed an accord to arrange feed-gas deliveries from the Agua Dulce hub in Texas.

The leading US liquefied natural gas industry body said it expected five export projects along the Gulf Coast to take positive final investment decisions in the next 12 months after just two were sanctioned so far in 2019 while American supplies could be directed at Europe in particular.

US LNG projects are facing stiffer opposition in the Rio Grande Valley as a state permit decision for the Texas LNG export project, one of three being developed near the Port of Brownsville, will have to wait at least another five months to progress.

Commissioners with the Texas Commission of Environmental Quality sent Texas LNG’s state permit application to the State Office of Administrative Hearings as a contested case based on a request from the City of Port Isabel.

Texas LNG is seeking permission from state and federal regulators to build a liquefaction plant In Cameron County along the Brownsville Ship Channel with initial capacity to export 4 million tonnes per annum.

The case is being followed closely by the “Houston Chronical” newspaper, which noted in a report that the project now faces tough opposition from “a coalition of neighboring communities, fishermen, shrimpers, environmentalists and Native Americans.”

The commissioners ruled that while Texas LNG is located outside Port Isabel's city limits, it falls within its extra territorial jurisdiction as it is part of the Brownsville metropolitan area.

Texas LNG Chief Operating Officer Langtry Meyer said the Houston-based company remains confident that it will receive a state environment permit.

“Texas LNG is committed to operating our project in an environmentally responsible manner, including using electric motors to minimize air emissions," said Meyer.

“By delivering clean, safe, low-cost Texas natural gas energy to our customers around the world, Texas LNG can contribute to a cleaner global environment.” he added.

The Texas LNG project is one of three being developed around Brownsville along with the Rio Grande LNG project of NextDecade Corp. and the Annova LNG venture, backed by Chicago-based utility company Exelon.

Texas LNG’s scope includes the building of two liquefaction Trains and support facilities as well as two LNG storage tanks, each of around 210,000 cubic metres capacity.

The LNG carrier berthing dock will be capable of receiving vessels with capacities of between 130,000 cubic metres and 180,000 cubic metres.

Meyer has said he was looking forward to allowing construction to begin and LNG production to commence by 2024.

“This project will bring jobs and investment to Cameron County and deliver clean, safe, abundant Texas natural gas energy to the world,” Meyer added in an earlier statement.

A final investment decision for Texas LNG is scheduled to be taken in the months ahead and is contingent on factors such as completing the required commercial agreements and obtaining financing.

Samsung Engineering of South Korea will provide all technical and engineering services for the project and is expected to take a minority stake.

The newspaper report noted that although multiple parties, communities and groups had requested “affected persons status” for Texas LNG's state permit application, Port Isabel was the only party in the state to receive it due to the project's location along State Highway 48.

The Texas environmental  commissioners ordered that the contested case hearing should take place within the next 150 days in the state capital Austin to address health and safety issues and impacts on plants and wildlife.

Port Isabel City Manager Jared Hockema told the “Houston Chronicle” that city officials are preparing for the hearing and plan to travel to Austin to testify against the project.

“We are gratified that the Commission recognized the clear impact that the proposed project will have on Port Isabel,” added Hockema.

“The city will continue to fight to protect our environment, our economy and our way of life from being destroyed by these LNG facilities,” the paper cited him as saying.

The US Annova liquefied natural gas export project planned for the south bank of the Brownsville Ship Channel in Texas, and whose owners include Chicago-based power company Exelon Corp., has signed a facilities agreement to book all the transmission needs of the plant.

Annova’s accord is with the South Texas Electrical Cooperative (STEC) for 405 megawatts of power for the export plant with capacity to produce 6.0 million tonnes per annum of LNG.

“The Annova LNG project has a significantly lower environmental impact on the Rio Grande Valley than other proposed projects due to its use of electrical power instead of natural gas to drive its liquefaction compressors,” said Omar Khayum, Annova Chief Executive.

“We are confident that through the executed agreement, STEC will provide all electric transmission services required for safe and reliable operation of the project,” added Khayum.

Annova added that Magic Valley Electric Cooperative, a member of STEC, will be the sole provider of electric energy to power the facility.

“This agreement is yet another example of Annova LNG’s momentum,” said Khayum.

“The project continues to make significant progress as we begin 2019,” he stated, noting that commercial operations are scheduled to begin in 2024.

Annova received its draft environmental impact statement in December 2018 prepared by the Federal Energy Regulatory Commission.

The project company added that it had modified its layout to create a 185-acre environmental conservation corridor and avoid impacting over 100 acres of wetlands.

Its environmental plans would also restore tidal exchange and estuarine habitats lost when the Brownsville Ship Channel and State Highway 48 were constructed.

The joint venture proposes the construction of six small-scale liquefaction Trains as well as an interconnected pipeline and marine export facilities.

Annova said it would support an average of around 700 on-site jobs over a four-year period and thereafter would need about 165 permanent full-time workers to run and manage the plant.

The company said it expected to receive its Final Environmental Impact Statement in the second quarter of 2019.

The joint venture’s equity owners in addition to Exelon are US engineering, processing and equipment company Black & Veatch of Kansas and construction firm Kiewit Corp., based in Omaha, Nebraska.

The company said it was in the process of securing one billion cubic feet per day of firm natural gas transportation from Agua Dulce Hub in south Texas to the project site.

NextDecade Corp., the developer of the Rio Grande liquefied natural gas export project in Texas, has held two public events to gather support for its second Texan export venture called Galveston Bay LNG.

The Houston-based company has just held two open house events, one at Rosenberg in Texas attended by landowners who inquired about the pipeline route, and a second at Texas City.

Galveston Bay LNG will include a 97-mile affiliated pipeline to move 3 billion cubic feet of natural gas per day from the Katy Hub in Waller County, while the liquefaction plant is proposed for a 550-acre site along the Texas City Ship Channel.

The Galveston Bay liquefaction plant would produce an initial 5.5 million tonnes per annum of LNG.

“The Galveston Bay project open houses represent the first of several opportunities throughout the regulatory and permitting process, led by FERC, for area residents to learn more about the proposed project and to ask questions,” said NextDecade.

The company is also near the end of the regulatory process for the Rio Bravo Pipeline in South Texas and the Rio Grande export plant at the Port of Brownsville to produce around 27 MTPA of LNG.

The Texas Commission on Environmental Quality granted the Rio Grande project and its Rio Bravo Pipeline a state permit in December 2018, though federal regulators were not expected to make a decision about the projects until July 2019.

The Rio Bravo Pipeline is expected to transport 4.5 billion cubic feet per day from the Agua Dulce area to the Rio Grande liquefaction plant in Brownsville.

NextDecade’s Rio Grande project remains subject to final review by the Federal Energy Regulatory Commission.

The FERC issued a draft environmental impact statement for the Rio Grande venture and its associated pipeline in October 2018.

A final EIS will be issued on April 26 for the Rio Grande developments and the FERC has established a 90-day decision deadline of July 25, 2019.

NextDecade, whose shares are listed on the Nasdaq stock exchange, anticipates a final investment decision on the Rio Grande LNG venture in the third quarter of 2019.

The US Annova liquefied natural gas export project planned for the south bank of the Brownsville Ship Channel in Texas, and whose owners include Chicago-based power company Exelon Corp., is moving forward in the permit process.