France's Engie pulls out of talks for US LNG import deal with NextDecade: company

London — France's Engie said Nov. 3 it has halted talks over a potential long-term supply agreement with US LNG developer NextDecade, with the French company having come under pressure not to import LNG produced from shale gas.

Engie in late October said it needed more time to consider any future agreement with NextDecade after it was reported that the French government and environmentalists were putting pressure on the partly state-owned company not to agree a deal because it did not conform to French climate change goals.

"Engie has decided not to proceed with commercial discussions with NextDecade on this gas supply project," the company said in emailed comments to S&P Global Platts, without elaborating. "We will not be making any further comment."

NextDecade -- which is developing the Rio Grande LNG facility in Texas -- declined to comment when contacted by Platts Nov. 3.

Environmentalist group Les Amis de la Terre France (Friends of the Earth France) welcomed Engie's decision to back away from a deal with NextDecade.

"The rejection of this contract by the government and Engie is a new explicit recognition of the climatic, environmental and social ravages of shale gas," campaigner Lorette Philippot said in comments to Platts.

"We expect France to pursue a consistent policy of zero tolerance for unconventional hydrocarbons," Philippot said. "This requires refusing to import and consume shale oil and gas, just as we refused to produce it nearly a decade ago."

In an effort to make its project more palatable to environmental interests, NextDecade in July abandoned the development of a sixth liquefaction train at its proposed 27 million mt/year Rio Grande LNG export facility, saying technology would allow it to achieve the same total capacity with five units.

While the move could save on construction costs, NextDecade emphasized the impact the reduced footprint would have on cutting carbon emissions.

NextDecade has said it plans to make a final investment decision on Rio Grande LNG in 2021, having pushed its project timeline several times, most recently in May when it said FID would occur next year.

To date, Shell's 20-year agreement to buy 2 million mt/year of supply from Rio Grande LNG is the only firm offtake deal tied to the terminal that NextDecade has announced.

NextDecade has said it needed to sell another 9 million mt/year of supply under long-term contracts to achieve FID on two or three trains at its site in Brownsville.