New setbacks for Global Infrastructure Partners’ Rio Grande LNG Terminal

The proposed Rio Grande Liquified Natural Gas (LNG) terminal, backed by private equity firm Global Infrastructure Partners (GIP), is facing new headwinds. On August 6th, the D.C. Circuit Court issued a decision to vacate the Federal Energy Regulatory Commission’s (FERC) approval of three gas projects, including Rio Grande LNG. This decision effectively stops the gas projects from moving forward, unless a future legal appeal is successful in overturning the decision. In its ruling, the court said “We appreciate the significant disruption vacatur may cause the projects. But that does not outweigh the seriousness of the Commission’s [FERC’s] procedural defects.” Among the defects found by the court was a failure to “account for its updated environmental justice analysis.”

“This is a victory for our ancestors and for the land.” – Juan Mancias, tribal chairman of the Carrizo/Comecrudo Tribe of Texas

Reuters reported that the court ruling comes after Rio Grande LNG had previously suffered “repeated delays.” Hart Energy reported that the District Court’s ruling is “threatening the legal status of major energy projects.”

In a press release, Juan Mancias, tribal chairman of the Carrizo/Comecrudo Tribe of Texas said, “This is a victory for our ancestors and for the land.”

Jared Hockema, city manager for the City of Port Isabel said, “Today’s decision is a great victory in our battle to protect public safety and preserve our environment and quality of life.” 

In another setback for Rio Grande LNG, according to an insurance statement obtained via public records request, insurance company CHUBB was no longer listed as an insurer of the Rio Grande LNG terminal. Banks have also pulled financial support from the project in the last several years. Societe Generale pulled out of the project in 2023, along with BNP Paribas and La Banque Postale. 

These financial and legal issues facing Rio Grande LNG terminal come in addition to longstanding and widespread opposition to the project, including from local South Texas communities. Earlier this summer, over 70 organizations from around the world signed on to a letter addressed to financial institutions associated with the Rio Grande LNG terminal, calling on them to cease financial support. 

Investors should call on GIP to listen to this widespread opposition and cancel the proposed project.

Community Members and PESP Meeting with GIP
On June 25th, leaders from the Carrizo Comecrudo Tribe, South Texas Environmental Justice Network and the Private Equity Stakeholder Project met with GIP in person in New York City to discuss the harmful environmental, economic and social impacts of the proposed Rio Grande LNG terminal. We attended this meeting to convey the importance of canceling this project. 

In the meeting, community partners laid out concerns that GIP has not engaged in a full consultation process with the original people of the region, the Carrizo Comecrudo Tribe of Texas, as detailed in the United Nations Declaration on the Rights of Indigenous People and the Free Prior and Informed Consent principle.

The community also expressed concern that GIP’s due diligence on the risks and opposition to the project was inadequate. GIP’s investment was announced in 2023, but as far back as 2016, the Point Isabel School District rejected tax abatements for the Rio Grande LNG terminal. In 2019 communities in Australia and South Texas demonstrated to oppose the terminal. Communities have engaged FERC around the project’s risks for years, and it has faced litigation since at least 2021.

GIP is invested in the Rio Grande LNG terminal via GIP Fund V. GIP has a minimum 46 percent stake in the terminal and is the largest equity owner in NextDecade, the holding company of Rio Grande LNG. 

Meeting with BlackRock Requested
BlackRock and GIP are currently undergoing merger proceedings. PESP and partners have opposed this proposed merger, citing numerous anti-competitive and conflict of interest concerns in both a letter to the FTC and DOJ, as well as numerous filings with FERC, however if the merger is successful, BlackRock will gain ownership of the Rio Grande
LNG terminal. As such, we have requested a meeting with BlackRock to discuss the same concerns we have raised with GIP.

Investors Urged to Call for Full and Final Cancellation of Rio Grande LNG Terminal
We urge investors to call for the cancellation of the Rio Grande LNG terminal project, heeding the calls of communities in South Texas, banks and insurance companies withdrawing support, and now the D.C. Circuit Court revoking the project’s FERC authorization.