NextDecade Corp.’s Rio Grande LNG challenge has cleared a serious hurdle that opens a clearer path to reaching a remaining funding resolution (FID) after FERC reaffirmed its approval for the ability and an related pipeline in a long-awaited order issued late Thursday. 

In a 3-1 vote, the Federal Power Regulatory Fee discovered its 2019 approvals for the Rio Grande challenge, together with the Rio Bravo Pipeline and the Texas liquefied pure fuel export challenge, are within the public’s curiosity and might transfer forward. The choice got here 18 months after the U.S. Court docket of Appeals for the District of Columbia Circuit ordered the Fee to assessment its authorizations for the South Texas initiatives.

The 27 million metric tons/yr (mmty) Rio Grande facility is amongst a coterie of U.S. export initiatives beneath growth which might be thought-about closest to being sanctioned. It has met greater than 60% of the contractual obligations wanted to underpin financing and transfer forward with the primary 17.6 mmty stage. The majority of the offers have been signed final yr, however contracting has slowed in what the market had attributed to FERC’s inaction. 

‘Essential’ For Commercialization

“We view this FERC order as important to NextDecade’s capacity to complete commercialization of the challenge,” stated Evercore ISI analysts led by Sean Morgan. Morgan and his staff stated in a notice earlier this month that further offtakers, potential challenge fairness backers and Rio Grande’s debt syndicate had possible been ready on a constructive consequence at FERC. 

In August 2021, the DC appeals courtroom discovered the Commision had not adequately defined its method in evaluating the potential impacts on local weather change and environmental justice (EJ) communities. The courtroom’s resolution got here in response to a petition for assessment filed by challenge opponents that need to cease it over its environmental impression and carbon emissions.

The courtroom agreed with opponents that the FERC evaluation of the initiatives’ impacts on local weather change was poor. The opponents, which embody environmental teams and native activists, argued that FERC ought to have used a “social value of carbon” protocol to calculate environmental impacts. 

The DC courtroom additionally agreed that FERC’s reliance on census blocks inside two miles of the challenge websites to evaluate impacts on EJ communities was arbitrary. The opponents had argued that environmental results from the potential initiatives would prolong effectively past that distance.

FERC Chairman Willie Phillips stated FERC has now included the social value of carbon figures in its newest order reaffirming the Rio Grande, Rio Bravo and Texas LNG authorizations. He stated the Fee additionally carried out a full assessment all through 2022 of how all three initiatives would impression EJ communities inside a 30 mile radius. 

The order on Thursday, Phillps stated, takes “an unprecedented and bipartisan step to guard environmental justice communities from potential issues in regards to the initiatives’ results on air high quality.”

FERC is now requiring Rio Grande, Rio Bravo and Texas LNG to file a plan guaranteeing that overlapping building and operation of the initiatives don’t exceed federal air high quality requirements. Phillips harassed that the order additionally “illustrates how the Fee is making progress on the critically necessary problem of cumulative impacts.”

Dissenting Opinion

Democratic Commissioner Allison Clements, nevertheless, dissented. She stated the Rio Grande approval is prone to create further authorized issues because it “creates an incomplete and insufficient report.”

Certainly, the Sierra Membership stated it will search a rehearing of the Fee’s resolution. The environmental group once more accused FERC of performing “as a rubber stamp for the fossil gasoline business…regardless of not adequately evaluating the environmental impacts of the initiatives and amidst widespread group and environmental justice issues.”

NextDecade was reviewing the order. It stated it’s nonetheless aiming to make an FID by the top of June.

Each Rio Grande LNG and Glenfarne Power Transition LLC’s 4 mmty Texas LNG challenge can be in Cameron County, close to the U.S.-Mexico border. Rio Bravo would transfer 4.5 Bcf/d from the Agua Dulce provide hub close to Corpus Christi to the Rio Grande export facility in Brownsville. Enbridge Inc. acquired the pipeline challenge in 2020. 

FERC on Thursday additionally authorised Driftwood Pipeline LLC’s Line 200 and 300 initiatives in Louisiana. The pipelines would supply as much as 5.7 million Dth/d to Tellurian Inc.’s Driftwood LNG challenge south of Lake Charles, LA, which has but to be sanctioned.