LNG development company NextDecade has sealed a engineering, procurement and construction contract with Bechtel covering the first phase of its 27 million mt/year Rio Grande LNG project in Brownsville, Texas, NextDecade said Tuesday.
The fully wrapped, lump-sum turnkey contract marks a milestone for the planned project, one of about a dozen in the US vying to secure customers and financing to be built in time to feed global LNG demand starting in the early to mid-2020s.
The company drew attention to its competitive price per ton for a greenfield project slated to be built under a lump-sum contract that includes cost, schedule and performance guarantees.
"Each liquefaction train is expected to have capacity up to 5.87 million mt/per annum of LNG, which would generate an EPC cost of approximately $543/mt for the first three trains," the company in a statement.
"Bechtel's extensive experience developing LNG projects on the US Gulf Coast, along with our advantaged site and technology choices, including Air Products C3MR and Baker Hughes GE rotating equipment, is expected to enable NextDecade -- in just the first three trains -- to have the lowest cost per ton greenfield LNG project built on the US Gulf Coast under a fully wrapped lump-sum turnkey EPC contract," said NextDecade CEO Matt Schatzman.
The first phase of the project entails three liquefaction trains, two 180,000 cu m storage tanks and two marine berths, for a total cost of $9.57 billion. The contract with Bechtel would allow Bechtel to start with construction of either two or three trains. At two trains, the cost would be $600/mt, as opposed to $543/mt for three trains.
The announcement came the same day Venture Global announced a $1.3 billion equity investment in its Calcasieu Pass LNG project in Cameron Parish, Louisiana, another project that has been marketed under a low cost-per-ton basis.
NextDecade is working toward a final investment decision by the end of the third quarter of 2019 and to start commercial operation in 2023. In March, it executed a long-term sales and purchase agreement with Shell for 2 million mt/year of LNG.
The US Federal Energy Regulatory Commission issued the final environmental impact statement for the project on April 26, moving Rio Grande LNG toward a FERC decision on certificate authorization this summer. NextDecade said it expects that order in July.
As with two other LNG export terminals proposed in the Brownsville Ship Channel area, FERC staff has found most impacts would be reduced to less than significant levels, but has flagged cumulative impacts of the projects on turbidity and shoreline erosion, federally listed wildcats and visual resources. While the commission has been split over greenhouse gas considerations, it approved four LNG projects so far this year under an agreement struck to bring FERC Commissioner Cheryl LaFleur on board. It is unclear how the cumulative impacts considerations will weigh into a decision on the three pending Brownsville area projects.
The Rio Grande LNG project also involves the related Rio Bravo Pipeline, comprising twin 42-inch pipelinesthat would run 137.5 miles from Agua Dulce, Texas, to Brownsville. At Agua Dulce, the pipeline would connect to existing pipelinenetworks linking to the Eagle Ford and Permian shale basins.
