NextDecade Starts Over in EPC Search

Texas-based NextDecade said September 4 it has been unable to negotiate a lump-sum turnkey engineering, procurement and construction (EPC) contract with McDermott International for its 27mn metric tons/year Rio Grande LNG project in South Texas.

NextDecade and McDermott had originally planned to sign a lump-sum turnkey EPC contract by the end of 1H 2018, but have now agreed not to execute that contract in the belief that McDermott would have to secure a joint venture partner in order to successfully execute and financially guarantee a project of Rio Grande LNG’s size and scope.

NextDecade will now launch a new competitive bid process to select a new EPC contractor, and has asked for bids from Bechtel, Fluor and McDermott. The selection process includes McDermott with the understanding that it will be required to find a joint venture partner before submitting a bid.

“Our focus remains on selecting an EPC contractor that shares our commitment to safety and is technically and financially capable of successfully delivering the Rio Grande LNG project,” NextDecade CEO Matt Schatzman said.

NextDecade now hopes to finalise a lump-sum turnkey EPC contract in 3Q 2019 prior to taking a final investment decision on the Rio Grande project.

According to a scheduling notice released by the US Federal Energy Regulatory Commission on August 31, a draft environmental impact statement on Rio Grande will be issued in October 2018, with a final environmental impact statement due by April 26, 2019. The deadline for final federal authorisation decisions is July 25, 2019.