The independent Texas-based company Next Decade LLC (NextDecade) started the pre-filling process in view to obtain the Federal Energy Regulatory (FERC) approval for its liquefied natural gas (LNG) Rio Grande LNG export terminal project to be located at the Port of Brownsville on the Texas Gulf Coast, at the boarder between Mexico and USA.
NextDecade Brownsville Rio Grande LNG Phase-2 History
Established in 2010, NextDecade mobilized experienced management to create one of the most dynamic company of the US LNG value chain.
Surfing on the shale gas glut, with a natural gas production continuing to grow, US generate series of newly established midstream companies to transport, store and export LNG.
Among the baby-boom of these LNG players, NextDecade intends to run its projects on fast-tract in order to improve return on investments for its stakeholders and financial partners.
This fats-track approach starts with the close connection that NextDecade maintain with gas suppliers on one end and gas off-takers on the other end to secure the financing of the project.
It also applies to the Rio Grande LNG project management where all the critical steps from site selection, FERC approval, then front end engineering and design (FEED) and finally the engineering, procurement and construction (EPC) phase up to the commissioning and start-up are thought from start to be implemented on fast-track.
In March 2015, NextDecade took an option to double the site acreage in Port of Brownsville in view to double the original size of Rio Grande LNG project.
On the same period, NextDecade submitted its application to FERC to initiate the pre-filling process.
In April 2015, FERC started Rio Grande LNG project pre-filling process with NexDecade.
To do so, NextDecade completed the pre-front end engineering and design (pre-FEED) work.
To be located in Brownsville, the Rio Grande LNG project will require the construction of a new gas pipeline to supply the natural gas from the Agua Dulce hub to Rio Grande LNG Export Terminal project.
With approximately 200 kilometers length, the so-called Rio Bravo Pipeline project is also subject to the FERC approval in the same way as the Rio Grande LNG Export Terminal project.
To be land-based along the Brownsville Ship Channel, the Rio Grande LNG project should require $8 billion capital expenditure covering the construction of:
– Gas treatment plant
– 6 LNG Trains
– LNG storage tanks farm
– Berths to host LNG Carrier
– Offloading facilities
– Offsites and utilities.
The Rio Grande LNG Trains should have a designed capacity of 4.5 million tonnes per year (t/y).
Because of its size, the Rio Grande LNG project should be developed in different phases.
NexDecade expects the first two LNG Trains of the Rio Grande LNG project to come into production by 2020.
— May 2015 —
NextDecade has signed an agreement with CB&I for the Front End Engineering Design (FEED) and engineering, procurement and construction (EPC) terms
— September 2015 —
NextDecade has engaged Sumitomo Mitsui Banking Corporation (SMBC) as Financial Advisor and Mandated Lead Arranger for its Rio Grande Liquefied Natural Gas (LNG) export project.
Under the agreement, SMBC will be responsible for securing debt financing for the Project.
After selecting CB&I for the FEED work, NextDecade is putting all the pieces together to move the project forward according to plan
— May 2016 —
NextDecade submitted its application to the FERC for the entire Rio Grande LNG project and its associated 200 kilometers gas supply pipeline.
NextDecade initiated this process after securing 26 million t/y commercial agreements out of the 27 million t/y Rio Grande total capacity.
NextDecade expects to receive its FERC approval in May 2017 and to start construction in following.
— September 2016 —
NextDecade has received the Department of Energy (DOE) approval for exporting LNG to the countries having a free trade agreement (FTA) with USA and expect to receive the approval for the non-FTA countries in 2017.
In parallel NextDecade has extended its commercial non-bidding agreements with clients exceeding the 27 million t/y designed capacity of the Rio Grande LNG project.
In this context, NextDecade is confident to start first shipments on 2020 according to plans.
— April 2017 —
NextDecade awarded all the long lead items for Rio Grande LNG plant project to GE.
The contract covers the turbines and compressors.
— September 2018 —
The Federal Energy Regulatory Commission (FERC) Office of Energy Projects issued environmental schedules for 12 liquefied natural gas (LNG) export terminal applications pending before the Commission including Rio Grande LNG.
The schedules reflect FERC efforts in recent months to streamline its review process for LNG project applications without compromising its statutory obligation to ensure safety and environmental protection.
NextDecade should be able to make the FID on early 2019.
— October 2018 —
The final environmental impact statement (EIS) is expected in April 2019, with FERC approval to follow and a final investment decision scheduled for the third quarter 2019.
— October 2018 —
As a consequence of CB&I take-over by McDermott, NextDecade has decided to retender the engineering, procurement and construction (EPC) contract.
In this purpose, NextDecaded has issued formal invitation to:
– Bechtel from USA
– Fluor from USA
– McDermott from USA with Saipem from Italy.
The contract includes the assessment of CB&I FEED conclusions and the EPC contract on a lump sum turn key (LSTK) basis.
NextDecade is planning to make the final investment decision on second quarter next year, so that the EPC contract should be awarded on Q3 2019.
— May 2019 —
In order to align its investment with its gas commercial agreements, NextDecade has decided to proceed in two phases:
– Phase-1 for the LNG Trains 1, 2 & 3
– Phase-2 for the LNG Trains 4 & 5
After retendering the EPC contract, NextDecade transferred the project phase-1 from CB&I (McDermott) to Bechtel.
Each LNG train will have a capacity of 5.87 million t/y of LNG.
In parallel NextDecade will provide Bechtel with $15 million stocks.
The Phase-1 final investment decision (FID) remains to be made on Q3 2019 for first LNG shipments in 2024.
The Phase-2 FID shall be considered in 2022 in respect with the commercial agreements to be signed in line with the LNG Trains 4 & 5 to add 11.74 million t/y capacity in 2026.
— July 2020 —
Despite the FERC decision to reject environmental groups claims against the project, NextDecade has redesigned its project to reduce carbon dioxide (CO2) emissions.
As a conclusion, the project will use 5 LNG trains instead of 6 as previously thought for the same capacity of production at 27 million t/y.
The consequence is to save 21% of the CO2 emissions and to reduce the environmental foot print of the project on the site.
In order to integrate all the consecutive changes in the project, the final investment decision (FID) has been postponed to 2021.
— October 2020 —
NextDecade developed proprietary processes using proven technology to cut carbon dioxide equivalent (CO2e) emissions by about 90% at its planned Rio Grande LNG facility, and is exploring options to address the remaining emissions to enable Rio Grande LNG to achieve carbon-neutrality.
— January 2022 —
With the first phase final investment decision (FID) delayed to end of 2022, the second phase should move into execution by 2025.
— May 2022 —
Although NextDecade is planning to make FID on Q4 2022 for the first phase, it submitted an application to US FERC to extend the deadline construction for the project by two years arguing that Covid generated delays in the project.
In postponing this second phase, NextDecade also expects to take more time to negotiate long term offtake agreements and benefit from far better conditions in some months than today.
Therefore, the FID on this Rio Grande LNG project should be made in 2025.
— January 2023 —
For the first phase, NextDecade has entered into a sale and purchase agreement (SPA) with Itochu Corporation for 1 million t/y for 15 years.
This last SPA should boost NextDecade to take the FID on the first phase.
NextDecade already signed SPA with:
– ExxonMobil for 1 million t/y for 20 years
– Guangdong Energy for 1 million t/y for 20 years
– China Gas for 1 million t/y for 20 years
– Galp for 1 million t/y for 20 years
– ENN for 2 million t/y for 20 years
— March 2023 —
At the CeraWeek, NextDecade announced to make the FID on mid-2023.
— June 2023 —
TotalEnergies signed a memorandum of understanding (MoU) with NextDecade to acquire 16.7% of the first phase.
But TotalEnergies also agreed to offtake 5.4 million t/y of LNG out of the 17.5 million t/y of LNG that should be produced in the first phase.
This offtake agreement will run for 20 years.
TotalEnergies will also invest in NextDecade up to 17.5%.
— October 2023 —
NextDecade launched the project kick off for the first phase.
— March 2024 —
NextDecade is working with Bechtel on the Train 4 design and engineering, the project activity can be considered at pre-FID.
NextDecade aims to make FID for the Trains 4 & 5 before the end of 2024.
— June 2024 —
NextDecade signed an offtake agreement with Aramco for 1.2 million t/y for twenty years on Train 4.
— August 2024 —
NextDecade continues to affirm that the FID will be taken by the end of 2024 for Train 4.
— September 2024 —
Following a court decision, the Federal Energy Regulatory Commission (FERC) decided to reinforce environmental requirements for the project, including phase 1.
NextDecade has already launched construction for phase 1 but could be forced to halt the development until the situation is cleared.
In the meantime, NextDecade canceled its CCS project and is waiting for new details from FERC.
— February 2025 —
NextDecade remains confident in resolving its legal dispute with the FERC.
Anyway, it is not yet resolved and should take one more year.
To do so, NextDecade reworks solutions for the CCS to be deployed at Rio Grande LNG phase-1 (Trains 1, 2 and 3) and phase-2 (Trains 4 & 5).
In addition, NextDecade signed the EPC contract for the train 4 with Bechtel.
Then, both companies are on discussion for the price revision regarding the EPC contract for the train 5.
NextDecade should receive FERC final order on November 2025 for the phase-2, therefore, it intends to make the final investment decision on early 2026.
— April 2025 —
NextDecade signed an offtake agreement with Aramco to offtake 1.2 million t/y for 20 years.
This new sale and purchase agreement (SPA) should help to bring financial confident in the project following the dispute with FERC.
— June 2025 —
NextDecade awarded the EPC work for the Train 5 to Bechtel.
Bechtel confirmed its award on the Train 4 thath it won in February 2025.
— August 2025 —
TotalEnergies acquired 10% on the second phase for the train 4.
Global Infrastructure Partners (GIP), an investment will finance up to $1.5 billion to acquire 50% share of Train 4.
If you are interested by more news on projects be sure to subscribe to our Newsletter to stay updated on upcoming industry insights!
You can also follow us for more content on LinkedIn or go directly on Project Smart Explorer to ask for a demo of our service.
