Jump In The Line, Part 4 - NextDecade Eyes FID on Rio Grande LNG Project with Carbon Capture

The world needs more LNG and the U.S. is answering that call. Two U.S. liquefaction projects, Venture Global’s Plaquemines LNG and Cheniere’s Corpus Christi Stage III, have already reached a final investment decision (FID) on a combined 23.3 MMtpa (3.1 Bcf/d) of export capacity, which will be online by mid-decade. But by the looks of it, we are just getting started. Next up could be NextDecade’s Rio Grande LNG, which has sold 75% of its first two trains’ capacity — enough to take FID, possibly by the end of the year. If it moves forward, not only will the project add another 10.8 MMtpa (1.43 Bcf/d) or more of export capacity to the Gulf Coast, it could also come with a new carbon capture and sequestration (CCS) facility, which has long been a selling point for the project. In today’s RBN blog, we continue our series on the U.S. LNG projects most likely to move forward, this time with a look at Rio Grande LNG.

We began this series at the beginning of the year, when there were three U.S. LNG projects that looked poised to move forward and a handful more just behind them — making progress, but not quite to the point of FID yet. In Part 1 we started with Venture Global’s Plaquemines LNG, which became the first U.S. project to take FID in the post-COVID wave of LNG expansion. Next, in Part 2, we covered Cheniere’s Corpus Christi Stage III, whose developer has also since committed to its construction. Both projects are now being built and targeting startups in the 2024-25 timeframe. Beyond that, however, both have continued to sell capacity and are likely to see additional trains take FID before construction is complete. Venture Global so far has taken FID on 13.3 MMtpa (1.8 Bcf/d) of export capacity, but the full project is 20 MMtpa and total capacity is nearly 90% sold out. Cheniere sold 2.8 MMtpa (0.4 Bcf/d) of capacity from an unnamed expansion at Corpus Christi this summer, which it later said would come from two additional mini-trains at Stage III totaling 3.3 MMtpa (0.44 Bcf/d). The project has just started its FERC application process and is already nearly sold out.

In Part 3 in March, we covered the controversial Driftwood LNG, Tellurian’s 11-MMtpa project, which began construction in Louisiana earlier this year but was finding it extremely difficult to secure financing. The project was underpinned by three 10-year deals with no liquefaction fee, which was in part why Tellurian has found financing so challenging, and now two of those deals have been scrapped. Shell pulled out of its agreement with Tellurian last week at the same time Tellurian said it was cancelling its contract with Vitol. This leaves only the 3-MMtpa, 10-year contract with Gunvor intact and means the project’s future is murkier than ever. Tellurian said it will pursue additional equity partners in the project after it pulled out of its contract with Vitol, but now essentially starts its offtaker search from scratch in a much more crowded field than when it made the now-canceled agreements.

[RBN Energy’s U.S. CO Infrastructure map brings together legacy Enhanced Oil Recovery (EOR) assets, as well as announced large-scale Carbon Capture and Sequestration (CCS) and Carbon Capture, Utilization and Sequestration (CCUS) projects, all in our signature concise, accurate, and intelligible style. Click here for more information.]

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