US LNG company NextDecade will not develop an LNG facility in Galveston Bay in Texas, US, after its evaluation found that the site was unsuitable.
NextDecade will now focus on its plans for the Rio Grande LNG export terminal in the Port of Brownsville, Texas, and hopes to achieve a final investment decision in 2021.
The company had leased the Galveston Bay site from the Texas General Land Office and the City of Texas City and had begun pre-filing proceedings with the US Federal Energy Regulatory Commission (FERC). However, during site investigations, the US Army Corps of Engineers (USACE) found that part of the site is under Federal Navigation Servitude and serves as an active Dredged Material Placement Area (DMPA) for the Texas City Ship Channel Federal Project. As such, the LNG facility could only be built if USACE requested the US Congress to release its constitutional right of Navigation Servitude over this DMPA.
The uncertainty led to NextDecade’s decision to abandon the Galveston Bay project. It will cease making lease payments and withdrawn from the FERC pre-filing proceedings. The company has also requested that the US Department of Energy terminate its June 2018 authorisation for LNG exports from Galveston Bay.
‘While it is unfortunate that the Galveston Bay LNG site is not viable for large-scale infrastructure development, this determination only further enhances the value of – and the need for – NextDecade’s world-class Rio Grande LNG project in the Port of Brownsville. Since 2015, NextDecade’s development activities have been acutely focused on delivering Rio Grande LNG and developing the largest LNG export solution linking Permian Basin and Eagle Ford Shale natural gas to the rapidly tightening global LNG market,’ says Matt Schatzman, NextDecade chairman and CEO.