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Societe Generale Explains Why It Pulls Out Of Rio Grande LNG Project

Next Decade's Rio Grande LNG project in Texas has seen a few delays. Delays which now could be explained by the fact that the project's financial advisor, Societe Generale, pulled out of the project early last year, it has now been revealed.

SocGen revealed for the first time on Tuesday why it pulled out of the Texas LNG project last year, Reuters said. While the bank did not go into details about why it has pulled out of the project, a SocGen spokesperson referenced its climate commitments, which call for an end of all LNG financing when the project is not aligned with the bank's human rights and ESG goals.

The bank pulled out of the project as far back as the first quarter of 2022 after serving as the lead bank in financing $11.5 billion for the project.

Next Decade has changed the goalpost for the financial approval for phase 1 of the project multiple times. Earlier this month, it set a new date of the end of the second quarter after it missed a deadline to issue Bechtel Energy, the chosen contractor on the project, a notice to proceed with construction. NextDecade's costs with Bechtel are expected to be around $11.5 billion.

That price includes three liquefaction trains, two 180,000 cubic meter storage tanks, and two marine berths. Capacity for the first phase is expected to be 17.6 mmty of LNG.

Earlier explanations for the delay were that the project only attracted purchase deals for 64 percent of the capacity for the first phase of the Rio Grande project, along with some regulatory hurdles that still need to be resolved.

Banks have been urged by climate groups to stop funding oil and gas projects, warning that their financing could jeopardize the energy transition.

By Julianne Geiger for Oilprice.com

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