The signing of a $7 billion, 20-year contract to ship liquefied natural gas from a future terminal in Brownsville, Texas, to a customer in France was blocked by that country’s government, according to media reports.

French utility Engie SA was told by the French government to wait on signing the contract with Houston-based NextDecade Corp., which was due to supply Engie with LNG from its future terminal at the Port of Brownsville. The news was first reportedby a French outlet on Oct. 2 and confirmed by the American news site Politico on Oct. 21.

The French government, which is a minority stakeholder in Engie, apparently told the company to delay signing the contract last month over worries that U.S. shale gas was too dirty. It wasn’t clear whether the contract would be canceled or possibly signed at a later date.

While NextDecade (Nasdaq: NEXT) didn’t respond to a request for comment, an activist with the local branch of the Sierra Club praised the decision.

“The French government has banned fracking in their own country, so it should come as no surprise that they wouldn’t want to lock in decades of fracked gas imports from here in Texas, where fracking pollution is left unchecked,” Rebekah Hinojosa said in a statement.

The oil and gas industry has long touted natural gas as a cleaner alternative to fuel and a necessary step in the transition to renewables. The International Energy Agency reported in 2019 that replacing the world’s coal plants with natural gas plants could reduce global power sector emissions by 10% and total carbon dioxide emissions by 4%.

But environmental activists worry about the damage caused by fracking, which the U.S. Environmental Protection Agency said in 2016 could harm drinking water, as well as the release of more climate change-causing methane into the air. Methane is the largest component of natural gas and warms the planet at a higher rate than carbon dioxide, according to the EPA.

It isn’t clear whether the reported Engie contract delay will have an impact on NextDecade’s final investment decision in the Brownsville project, which is slated for next year. NextDecade’s project, called Rio Grande LNG, is scheduled to be the largest of three planned LNG facilities at the South Texas port. All of the projects are being developed by Houston-based companies, but none have broken ground.

By Jessica Corso – Reporter

Courtesy of The Houston Business Journal

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