Plans for Texas City
The Woodlands-based NextDecade has a lease for a 1,000-acre site
A company is looking to a Gulf location for an LNG exporting project.
The Woodlands-based Next Decade is ho ming in on a Texas City location near Galveston for its latest effort to build a multibillion-dollar liquefied natural gas export facility.
Next Decade, which has focused on an LNG export project in Brownsville, said it signed lease agreements for a nearly 1,000-acre site at Texas City’s Shoal Point. The location offers port access, proximity to natural gas pipelines andthe potential to expand, the company said.
The move comes after the Point Isabel school board in Brownsville rejected tax incentives for NextDecade’s Rio Grande LNG project there, as well as for the competing An nova LNG project ownedbyChicago-based Ex el on Corp. Residents and environmental activists teamed up to oppose the projects. NextDecade and An nova have vowed to proceed in Brownsville without the tax breaks.
Still, NextDecade also has plans for Texas City to export the cheap and abundant natural gas supplies produced from Texas shale. The company is working to attract additional financing for both projects.
Theprojects are part of a growing number of LNG projects underdevelopment along the Gulf Coast and other regions as the U.S. increasingly shifts from importer to exporter of energy, another example of howhydraulic fracturing, horizontal drilling andother technologies that sparked the shale revolution have changed the global energy equation.
Last February, Houstonbased Che ni ere Energy became the first U.S. LNG exporter, shipping liquefied natural gas from its Sabine Pass terminal near the Texas-Louisiana border. In November, Liquefied Natural Gas Ltd. of Houston and Perth, Australia, received final U.S. regulatory approval to export LNG and begin building a $4.3 billion LNG project, called Magnolia, south of Lake Charles, La.
Five other LNG export projects, including two in Texas, also are under construction in the U.S., including Houston-based Kinder Morgan’ s El ba Island LNG project in Georgia, which began construction in early November.
“Now more than ever, the U.S. has the potential to benefit fromthe incredible natural gas resources we have right here in Texas,” Next Decade CEO Kathleen Eisbrenner said in announcing its Texas City plans. “The U.S. is the mostcompetitive source of LNG in the world, and Next Decade is looking forward to bringing new supply to the global marketplace from the heart of the global energy industry.”
But the issue facing Next Decade and other LNG developers is timing. The world is experiencing a glut of LNG as supplies grow and demand temporarily wan es, according to analysts. The question is when demand will again outstrip supply. Mostanalysts don’t expect that to happenuntil the next decade.
Theprojects, however, can take years to develop, and many of the companies are betting that they can bring their projects online just as global demandpicks up
French energy giant Total is among those making that bet. Total recently said it will invest more than $200 million to buy a 23 percent stake in the liquefied natural gas company founded by Char if Souki, the former Cheniere CEO and a pioneer of U.S. LNGexports. Souki’s Tellurian Investments is developing the $12 billion Driftwood LNG project south of Lake Charles, with the goal of beginning operations in 2022 and the expectation that growing global demand by then will have wiped out the glutofLNG.