A French utility won’t move forward with a $7 billion deal to import liquefied natural gas from Houston-based NextDecade Corp., roughly two weeks after contract negotiations paused over reported concerns about the methane emissions footprint of U.S. natural gas.
“ENGIE decided not to pursue commercial discussions with NextDecade on this gas supply project,” the company confirmed to E&E News in an email yesterday. French newspaper Le Monde first reported that Engie SA would not finalize the contract.
The canceled deal marks a blow for NextDecade, which is working to secure a final investment decision in 2021 on the planned Rio Grande LNG export project, located in Brownsville, Texas, which seeks to use an “abundant gas supply” from the Permian Basin and Eagle Ford Shale.
NextDecade did not respond to a request for comment, but told E&E News earlier this week that the company “is proud of its leadership in environmental and social performance.”
Kevin Book, managing director at research firm ClearView Energy Partners LLC, said multiple factors are overlapping, but cited the French government’s “heightened trade-based climate concerns” and European efforts to meter methane — a potent greenhouse gas — as two dominant trends surrounding the deal between Engie and NextDecade.
“Today, the bigger effect appears to be the lack of clear signal from the U.S. federal government that U.S. gas is regulated to the standard that Europe can accept, and that France can accept,” Book said yesterday.
[Carlos Anchondo and Miranda Willson]