(Bloomberg) -- NextDecade Corp.’s share price tumbled as much as 20%, the biggest plunge in more than a year, after a court ruling that struck down the company’s federal regulatory permit for its liquefied natural gas export complex in Texas.
The D.C. Circuit court ruling is a setback for the company, which inked a preliminary deal with Saudi energy giant Aramco to buy the super-chilled fuel from an expansion at the South Texas plant known as Rio Grande LNG. Environmental organizations spearheaded by the Sierra Club led the litigation through the circuit court to challenge the Federal Energy Regulatory Commission’s approval of Rio Grande LNG and another planned project, Texas LNG.
With the US on track to double its LNG export capacity in the next few years, the court ruling reverberated across the wider industry that’s already dealing with political risk ahead of the US elections around the Energy Department’s permitting pause for new LNG projects. This could also layer additional uncertainty for global buyers considering US LNG supplies into Asia and Europe at a time when companies are grappling with decarbonization.
“Regulatory certainty is vital for developing LNG export facilities, and this recent decision is a step in the wrong direction,” said Charlie Reidl, the executive director for industry group Center for LNG.
Shares of NextDecade closed down 18% to $6.39.
NextDecade’s spokeswoman Susan Richardson called the decision “unexpected” and said that the company was reviewing the decision and assessing its options. Richardson said construction continues on the first phase of the project, which also has customers that include Shell Plc., Exxon Mobil Corp. and TotalEnergies SE, among others.
Dave Cortez, director of the Sierra Club Lone Star Chapter, dubbed the ruling a “win for the people, the land, and our future” in an emailed statement.
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