NextDecade(NEXT) ZACKS·2024-08-13 14:45Core Viewpoint - NextDecade Corporation's Rio Grande LNG project in Texas faces significant setbacks after a U.S. Court of Appeals revoked the permit issued by FERC, leading to a sharp decline in the company's share price [1]. Regulatory and Legal Context - A lawsuit was filed by the Sierra Club and other parties against FERC, arguing that the environmental impact of the Rio Grande LNG project was not properly assessed as required by the National Environmental Policy Act and the Natural Gas Act [2]. - The court ruled that FERC should have issued a supplemental environmental impact statement during the remand process, siding with the arguments presented by the plaintiffs [2]. Company Response and Project Status - NextDecade expressed disappointment with the court's decision and is currently reviewing its options [4]. - Despite the legal challenges, construction for Phase 1 of the Rio Grande LNG facility continues, with completion expected by early 2029 [5]. - The company is concerned about the impact of the court's ruling on the timeline for the Final Investment Decision (FID) for Train 4, which was initially targeted for the second half of 2024 [5]. Financial Aspects - The estimated construction cost for Train 4 and its associated infrastructure is projected to be between $6 billion and $6.2 billion, consistent with the costs for the three trains in Phase 1 [6]. - NextDecade awarded a $4.3 billion engineering, procurement, and construction contract to Bechtel Energy Inc. for Train 4 just before the court's ruling [4]. Strategic Partnerships - Earlier in 2024, ADNOC acquired an 11.7% stake in Phase 1 of the Rio Grande LNG project and signed a 20-year offtake agreement for LNG from Train 4 [7]. - Saudi Aramco entered into a non-binding agreement with NextDecade for a 20-year LNG offtake deal, agreeing to purchase 1.2 million tons per annum from Train 4 [7].