Rio Grande to Account for 5% of Global LNG

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)

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Summary

NextDecade said its Rio Grande facility for LNG exports from Texas could accommodate as many as 10 liquefaction trains, helping to establish itself as a major global supplier.

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NextDecade has Big Plans

Operating the Rio Grande export facility for liquefied natural gas (LNG), NextDecade (Houston, Texas) said it believes it will account for 5% of the global volumes for the super-cooled gas by the early part of the 2030s.

In mid-October, NextDecade made its final investment decision (FID) on Train 5 at its Rio Grande LNG facility in Brownsville, Texas. Train 5 has an expected production capacity of approximately 6 million tonnes per annum (MTPA), bringing the total expected LNG production capacity under construction at Rio Grande LNG to approximately 30 MTPA.

Matt Schatzman, the company's chairman and chief executive officer, said those volumes should account for about 5% of global supplies by the early 2030s, "and we are focused on potentially doubling LNG capacity at the site, starting with the development and permitting of Trains 6 through 8."

Lots of Room for Expansion

The facility is under construction but not yet delivering LNG. The first two trains are about 30% completed, while Train 4 is still in the drawing stage. The company believes there is enough room at the 1,000-acre campus in Brownsville for up to 10 liquefaction trains.

The project is supported already by offtake agreements with Abu Dhabi National Oil Company (United Arab Emirates), TotalEnergies (Courbevoie, France) and Saudi Arabian Oil Company (Aramco) (Dhahran, Saudi Arabia). Domestic companies making offtake agreements include EQT Corporation. (Pittsburgh, Pennsylvania.) and ConocoPhillips (Houston).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can view a list of detailed project reports on the Rio Grande LNG facility and the plant profile.

The U.S. is already the world leader in LNG exports and more is on the way. Cheniere Energy (Houston) said last week that it was progressing with plans to develop a third stage at its Corpus Christi facility.

Feed Gas to U.S. LNG Terminals Sets Record

The amount of feed gas running to operational terminals, meanwhile, set a record at 18 billion cubic feet on Friday, besting the previous record set only on Oct. 25. According to IIR Energy's NATGAS TODAY daily natural gas report from Friday, that's 2 billion cubic feet above month-ago levels and 4.6 billion cubic feet above year-ago levels.

If all projects under construction make it to the finish line, the U.S. Energy Information Administration, part of the Department of Energy, said total LNG capacity across North America will increase from 11.4 billion cubic feet per day (Bcf/d) on average at the end of 2024 to 28.7 Bcf/d in 2029, with much of that coming from the U.S.

'Way Too Much' U.S. LNG?

Headwinds could be emerging, however, as the pace of increase in U.S. gas production is not expected to keep up with expected gains in LNG exports. Meanwhile, the International Energy Agency said there could be a supply glut in the 2030s that could deter future investments.

Delivering a video address in conjunction with last month's Gastech conference, Vivek Chandra, the chief executive officer of Gulfstream LNG, which is proposed for Louisiana, said there is "way too much" LNG expected from the U.S., which could be "a recipe for disaster."

Key Takeaways

• NextDecade believes it will be a major LNG supplier in the 2030s
• But its facility in Brownsville, Texas, is barely into the construction phase
• There could be "way too much" LNG on the market soon

By the Numbers

• 10 liquefaction trains could be built on a 1,000-acre site in Texas
• 28.7 Bcf/d expected from North American by 2029
• 30 MPTA expected from the Rio Grande facility

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About Industrial Info

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).