PARIS: Societe Generale pulled out of Texas-based energy company NextDecade’s Rio Grande Liquefied Natural Gas (LNG) project last year, the French bank disclosed for the first time on Tuesday, in news that could help explain the project’s repeated delays.
Without commenting on this specific decision, a SocGen spokesperson pointed to its climate commitments, which include ending all LNG financing where the project is not aligned with the bank’s human rights and environmental, social and governance goals.
As the project’s mandated financial adviser, SocGen had been the lead bank in the financing of some $11.5 billion for the LNG plant before exiting this role in the first quarter of 2022.
NextDecade did not reply to a request for comment.
Banks across the world are under pressure from activists and some investors to do more to help tackle climate change. Groups and representatives of Indigenous tribes that have campaigned against the project cheered SocGen’s announcement.
“Years and years of facing these banks and demanding that they step off our sacred lands have led us to these great victories,” said Juan Mancias, chairman of the Carrizo Comecrudo Tribe of Texas, also citing a 2017 decision by French bank BNP Paribas to no longer directly finance LNG exports from shale, including a separate project in Texas’s Rio Grande valley.
“The issue is now for other banks to also commit not to support the project, as adviser or financier,” said Lorette Philippot of Friends of the Earth France.
NextDecade has repeatedly pushed back the projected date for a financial go-ahead on the first phase of Rio Grande LNG, this month setting a new target for the end of the second quarter.
The company holds a contract with construction giant Bechtel to build the first three of its five liquefaction units at an estimated cost of $11.4 billion, subject to revision before a final investment decision, it said this year.
NextDecade has signed long-term purchase agreements with potential customers including ExxonMobil, China Gas Holdings, GALP, Itochu Corp and Engie.
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