NextDecade cancels proposed Galveston Bay LNG plant

NextDecade Corp. has completed evaluation of the Galveston Bay LNG site and determined that the site in Texas City, Tex., is not suitable for development of its planned 16.5-million tonne/year (tpy) LNG plant.

The US Army Corps of Engineers (USACE), Galveston District, advised that a portion of the Galveston Bay LNG site is under federal navigation servitude as an active dredged material placement area (DMPA) for the Texas City Ship Channel Federal Project. The Galveston Bay LNG project cannot be constructed without USACE requesting that Congress – via the Water Resources Development Act or other legislation – authorize the release of its constitutional right of navigation servitude over this DMPA.

Due to the potential for prolonged uncertainty around the prospect of such a release by USACE, NextDecade has forfeited the Galveston Bay LNG site and will no longer make lease payments to the site’s landholders, the Texas General Land Office and the City of Texas City. NextDecade has also informed the Federal Energy Regulatory Commission (FERC) of its intent to withdraw Galveston Bay LNG from FERC pre-filing proceedings and cease all related activities. The company also requested that the US Department of Energy terminate its June 2018 authorization for export of LNG from Galveston Bay LNG.

NextDecade said that the decision further enhances the value of and need for its 27-million tpy Rio Grande LNG plant in the Port of Brownsville, Tex., where late-stage development activities are ongoing. NextDecade added that it continues to work on remaining commercial agreements needed to achieve a final investment decision (FID) on Rio Grande LNG in 2021.

The company last year cut the plant’s planned six production trains to five (OGJ Online, July 15, 2020). Rio Grande LNG is expected to be complete in late 2023, pending timely FID.