NextDecade Corporation announced that the Company has completed an evaluation of the Galveston Bay LNG site and determined that the site in Texas City is not suitable for development of an LNG facility and related infrastructure and utilities.
The U.S. Army Corps of Engineers (USACE), Galveston District, has advised that a portion of the Galveston Bay LNG site is under Federal Navigation Servitude and serves 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.
On account of the potential for prolonged uncertainty around the prospect of release of Federal Navigation Servitude by USACE, NextDecade has elected to forfeit 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. Additionally, NextDecade has 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 has also requested that the U.S. Department of Energy terminate its June 2018 authorization for export of LNG from Galveston Bay LNG.
Galveston Bay is located in the western Gulf of Mexico along the upper coast of Texas. It is the seventh-largest estuary in the United States, and the largest of seven major estuaries along the Texas Gulf Coast. The bay is encompassed by Greater Houston, the fifth-largest metropolitan area in the United States. The Port of Houston, which has facilities spread across the northwestern section of the bay, is the second-busiest port in the nation by overall tonnage.
“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,” said Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer. “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.”
The circumstances of Galveston Bay LNG have no impact on NextDecade’s Rio Grande LNG project in the Port of Brownsville, where late-stage development activities are ongoing. NextDecade continues to work on remaining commercial agreements needed to achieve a final investment decision on the Rio Grande LNG project in 2021.
NextDecade Corporation is a LNG company focused on delivering the 27 mtpa Rio Grande LNG export facility in South Texas. Rio Grande LNG will be the largest U.S. LNG export solution linking Permian Basin and Eagle Ford Shale natural gas to the global LNG market.
(Source: NextDecade – Image: NASA)