NextDecade to Challenge Court Ruling on $18.4B LNG Project

NextDecade Corporation is set to challenge a recent court ruling that has cast uncertainty over its ambitious Rio Grande LNG project. The company's CEO, Matthew Schatzman, has announced plans to appeal the decision made by the D.C. Circuit court on August 6, 2024, which overturned the Federal Energy Regulatory Commission's (FERC) approval for the initial phase of the $18.4 billion venture.

The court's decision requires FERC to reassess the project's impacts, potentially necessitating a new environmental impact statement and public comment period. Despite this setback, Schatzman remains resolute, stating, "We are committed to taking any and all legal and regulatory actions to ensure that phase 1 will be delivered on time and on budget."

The Rio Grande LNG project, located at the Port of Brownsville, Texas, represents a significant investment in the growing liquefied natural gas (LNG) industry. The first phase of the project aims to achieve a capacity of 17.61 million tons per annum of liquid gas, with completion initially scheduled for early 2029.

The court ruling has had a notable impact on NextDecade's financial standing, with the company's stock price declining by 39% since the August decision. Schatzman attributes this drop to the additional project risks introduced by the court's ruling.

Despite these challenges, NextDecade reports continued support from its customers and investors. The company has secured purchase orders for approximately 92% of total capacity for the first two trains and 88% for the third train. Major backers of the project include Global Infrastructure Partners and French energy giant TotalEnergies SE.

The LNG industry has experienced rapid growth in recent years, with the United States emerging as a significant exporter. However, LNG facilities are known for their complexity and high construction costs, often running into billions of dollars. The Rio Grande LNG project exemplifies these characteristics, with its substantial price tag and long development timeline.

As NextDecade prepares to navigate the legal challenges ahead, the company faces a critical period that could shape the future of this major infrastructure project. The outcome of this appeal process may have far-reaching implications for the LNG industry and energy infrastructure development in the United States.

"We are committed to taking any and all legal and regulatory actions to ensure that phase 1 will be delivered on time and on budget."

The coming months will be crucial as NextDecade pursues its legal options, potentially escalating the case to the U.S. Supreme Court if necessary. The company's determination to see the Rio Grande LNG project through to completion underscores the high stakes involved in large-scale energy infrastructure developments.