Engie SA, one of France’s largest energy companies, put a $7-billion deal to import US LNG on hold due to the government’s request. Engie said it had delayed making a decision on the contract to purchase LNG from NextDecade. The deal is for a 20-year LNG supply, which runs through 2045. It is needed for NextDecade to start the construction of its Rio Grande LNG export plant in Texas. Engie said that its board would need a “deeper examination” to consider the contract.
The deferral came amid greater scrutiny over the gas industry’s CO2 emissions and environmental impact. The French government, which controls a 23.6% stake in Engie, was reported to have asked the company to hold off the contract. Previously, the government also said it would stop providing companies with state export guarantees on projects involving shale oil in 2021, all types of oil from 2025, and natural gas from 2035. The country has adopted laws to be a carbon neutral economy by 2050.
The US began exporting LNG in 2016, and President Donald Trump has been promoting the fuel to his European allies as a counterweight to Russia’s dominance in the region’s gas markets. A spokeswoman with the US Department of Energy said halting the LNG deal for political posturing is narrow-minded and short-sighted. Meanwhile, NextDecade refused to disclose its commercial dealings. The company said that it is working on sustainability measures at its Rio Grande LNG facility in Texas, currently waiting for a final go-ahead.
