NextDecade: Rio Grande LNG Submits Official Pre-File Request to the FERC and receives notification of acceptance

On Friday, March 20, 2015 NextDecade, LLC submitted an official request to the U.S. Federal Energy Regulatory Commission (“FERC”) to enter the Pre-Filing process for its Rio Grande Liquefied Natural Gas (“LNG”) project and associated Rio Bravo Pipeline. Today NextDecade, LLC received notification from FERC of acceptance into the Pre-Filing process and was assigned docket number PF15-20-000.

“NextDecade is thrilled to initiate the FERC process for our Rio Grande LNG project,” said Kathleen Eisbrenner, founder and CEO of NextDecade. “Not only is this an important milestone, but it also signals the beginning of a crucial process that will lead to the best possible project. NextDecade is actively working with the FERC, our partners and communities throughout the Rio Grande Valley to bring this exceptional project to fruition.”

Rio Grande LNG, a wholly owned subsidiary of NextDecade, is a multi-billion dollar land-based LNG export project located on a 1,000-acre site along the Brownsville Shipping Channel in Brownsville, Texas. NextDecade’s proposal includes plans for up to…

Read more at The Houston Business Journal.

Binational Energy Consortium Launching for Burgos Basin

A binational Burgos Basin energy consortium is being created and organizers are looking for members from south Texas and northeastern Mexico to join.

A conference was held at Texas A&M International University in Laredo on Friday to explore the concept and the next step is to meet with United States and Mexico officials in March to confirm the name of group.

In his opening remarks, City of Laredo Mayor Pete Saenz said the recent Mexican energy reforms have potentially created “a huge, economic game changing dynamic for border communities.”

Saenz said the reforms provide South Texas an opportunity to become leaders in the marketing and supply of various goods, materials and services to Mexico, in addition to becoming leaders in the exploration, development, production, transportation and marketing of hydrocarbons from the Burgos Basin.

“In an effort to attract large scale corporate investment, we need to identify ourselves as a unified region that spans nearly 300-350 border miles and which contains and offers multiple resources some of which include: our vehicular/commercial bridges and rail bridges, our seaports, airports, industrial park acreage and manufacturing plants; our customs, warehousing, logistics, transportation and trade experience.” Saenz said.

Laredo Mayor Pete Saenz

Laredo Mayor Pete Saenz

“Just as importantly, our region offers an abundant understanding and appreciation of the Mexican culture, its language, customs and business traditions.”

In addition to Saenz, leaders attending the TAMIU event included Webb County Judge Tano Tijerina, TAMIU President Ray Keck, TAMIU Provost Pablo Arenaz, Ofelia Garza of CANACINTRA; Javier Solis, secretary of economic development for Nuevo Laredo, Guillermo Dominguez Vargas, of the Comisión Nacional de Hidrocarburos in Mexico, and Maria Calderón-Porter, assistant vice president for global initiatives at TAMIU.

Calderón-Porter, who is also director of the Binational Center at TAMIU, discussed the idea of setting up a consortium when making a presentation at the 21st Annual U.S.-Mexico Border Energy Forum in Monterrey last October. She said she would like to see binational, bicultural and bilingual energy industry workers transfer seamlessly from the Eagle Ford Shale to the Cuenca de Burgos.

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LNG Exports to Create More Economic Opportunity in Valley and Texas

by Julian Alvarez, President and CEO of Rio Grande Valley Partnership

Much of the nation’s growth in natural gas production has taken place in Texas and in particular, the rapid expansion of production in the Eagle Ford Shale in South Texas.

As the nation’s second most populous state and the largest producing state, Texas and the Rio Grande Valley are uniquely positioned to be at the forefront of the historic opportunity presented by expanding exports of LNG.

LNG exports give the U.S. the ability to assert global energy leadership, strengthen its economy and create good-paying jobs for the hard working men and women in the Rio Grande Valley. The Rio Grande Valley Partnership is focused on creating the relationships and developing programs that advance the region by increasing economic growth and improving the quality of life in the Rio Grande Valley.

The Eagle Ford Shale is providing both of these. The shale play has seen a growth in hotels, restaurants, retail outlets and distribution centers. More importantly, it has created an environment that is beneficial and supportive for the growth of small businesses and entrepreneurialism. As we all know, small businesses are the back bone of every community.

Unfortunately, the recent energy boom has its naysayers, including some in the business community. A small but vocal group of companies have warned of negative impacts of expanded LNG exports on America’s “manufacturing renaissance” and energy prices in Texas. Yet, numerous studies continue to demonstrate their argument is flawed.

Expanding LNG exports will create jobs and provide economic benefits to the Rio Grande Valley region. LNG exports would incentivize new infrastructure investments worth billions of dollars in American communities. A recent study by ICF International estimates that LNG exports will create up to 155,000 jobs for Texans in construction, operations, exploration and production by 2035 and contribute up to $31.4 billion to the local economy as new wealth is generated in the state.

In a press release earlier this year, our own State Senator Juan “Chuy” Hinojosa highlighted the benefits of the energy industry to the Rio Grande Valley region. “We are seeing tens of thousands of new jobs created, higher wages being paid, billions of dollars in investments in the region.” Senator Hinojosa called this boom an Energy Renaissance.

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Oil Price May Slow Development of Mexico’s Burgos Basin

Mexico is getting ready to welcome the U.S. shale revolution into its borders after 75 years of state monopoly. The timing couldn’t be worse.

As a flood of supplies from Texas to North Dakota sends oil into a nosedive, U.S. producers are reducing investment budgets for 2015. The cuts dim the chances they’ll take their fracking and horizontal drilling capabilities down south anytime soon.

After changing the constitution last year to allow foreign oil investment into its territory, Mexico is having to adjust, too. Regulators are considering reworking and potentially delaying leases for the country’s portion of the giant shale formation that encompasses the Eagle Ford in Texas.

“They’re going to have all of the issues of depressed price that the people in the Eagle Ford are having now,” said Michael P. Darden, global chair for oil and gas transactions at law firm Latham & Watkins LLP in Houston.

Energy ministers from the U.S., Canada and Mexico are set to meet Dec. 15 in Washington to discuss the implications of Mexico’s energy reform for the rest of the continent.

Mexican offshore assets have drawn interest from oil majors from Exxon Mobil Corp. (XOM) to Royal Dutch Shell Plc (RDSA) as the end of the monopoly triggers a race to gain a foothold in the country. The question is how quickly producers will be willing to move into the higher-risk, more costly prospects.

With Mexican shale possibly having to wait, cheaper offerings in shallow waters might have to do for now.

“In response to the falling prices, the government is bidding out the most attractive, better margin projects first,” said James K. Alford, a partner focusing on Mexico energy reform for the law firm Locke Lord LLP in Washington.

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Mexico’s Burgos Basin Provides Boom for Texas Law Firms

Carlos Valencia and Tatiana Escribano are two of the most sought-after corporate legal advisers in Mexico.

Until two years ago, they were partners at Dallas-based Thompson & Knight’s Mexico City office. They moved their practice to DLA Piper, a 4,000-lawyer firm headquartered in Chicago and London. One month ago, Valencia and Escribano switched firms yet again, joining global giant Baker & McKenzie.

Chances are good the duo will be poached again by yet another firm.

Big law firms in Texas and beyond are jockeying for position to attract corporate clients seeking to invest tens of billions of dollars in Mexico.

The reason: The border nation is reforming its energy market. For the first time in 75 years, Mexico’s rich oil and gas reserves will be open to private foreign investors for exploration and production.

Dozens of law firms, most of them based in Texas or with prominent Texas operations, are seeking to expand into Mexico. Some have opened new offices or want to do so.

Other firms are creating joint ventures with Mexico firms or raiding firms that have lawyers experienced in Mexican law.

“I think the law changes will absolutely transform the legal market in Mexico, but more importantly, those changes will transform the country, period,” said Luis Gomar, the partner-in-charge of Dallas-based Strasburger & Price’s Mexico City office.

The competition is definitely heating up.

“What is happening in Mexico is extraordinary, and our business interests and legal needs in Mexico are going to significantly increase with these energy reforms,” said Clay Scheitzach, senior vice president and senior corporate counsel at Xerox Business Services in Dallas.

“Energy companies and nonenergy companies are going to need more lawyers to help us with contracts, dealing with business-to-business and labor disputes, and other legal issues that will surface under Mexican law,” he said.

Law firms are debating whether they need to open outposts in Mexico or try to attract clients from their existing Texas offices.

Four Texas-based law firms — Haynes and Boone, Thompson & Knight, Gardere Wynne Sewell and Strasburger & Price — have lawyers permanently based in Mexico. Norton Rose Fulbright is seeking to open an office.


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Burgos Basin Consortium Announced in Rio Grande Valley

Rio Grande Valley economic development leaders did not really get involved with the development of the Eagle Ford Shale play because it was deemed too far removed from the region.

That is not the case with the Cuenca de Burgos in northern Mexico, which is thought to be many times bigger than Eagle Ford.

Burgos Basin

Burgos Basin

Today, a new regional consortium is to be unveiled in McAllen today that will focus on how northern Mexico and South Texas can make the most out of oil shale development in the Burgos Basin.

“We are creating a consortium of communities, non-profits and economic development corporations that are interested in a collaborative effort to see how our region can take advantage of what is going to happen just south of Reynosa,” said Steve Ahlenius, president of the McAllen Chamber of Commerce.

Steve Ahlenius - McAllen Chamber of Commerce President

Steve Ahlenius – McAllen Chamber of Commerce President

The group is being titled the Burgos Shale Consortium and the announcement will be held at the McAllen Chamber of Commerce offices at 10 a.m.

Ahlenius said Mexico is a key player in the Consortium. “Several key players from Tamaulipas will be at the announcement,” he said. Ahlenius listed four key goals for the consortium:

*Information and economic impact studies

*Workforce Development

*Business Development and Expansion

* Enhance economic ties between S. Texas and N. Mexico and expansion for Tamaulipas

Ahlenius said two key drivers have positioned South Texas to take advantage of the Burgos Oil Shale play. One is that drilling and recovery technology has now enabled oil companies to recover oil and oil byproducts that just ten years ago were not recoverable; and two, the sweeping energy reform in Mexico that now allows multinational oil producers to invest in Mexico.

“The region is now in a position, because of the location of the Burgos field and staging, to play a major role in energy and energy related businesses. In addition, we are positioned to attract major international companies that require cost effectiveness and energy abundance for their production,” Ahlenius said.

The McAllen Chamber leader said two key events will happen for the Consortium in the next four months, Firstly, the Consortium will fund an economic impact study of the impact and potential of the oil play. And secondly, a Burgos Oil Shale Consortium Conference will be held in late March of 2015 in McAllen.

Ahlenius said the cost of joining the Consortium will be $500 per entity.

Tamaulipas Governor Egidio Torre Cantú recently hosted a discussion on the potential impact of Mexico’s energy reforms on his state. The event was held at La Fogata in Reynosa and several Valley leaders were present, including state Sen. Juan Hinojosa, state Rep. Sergio Muñoz and McAllen Mayor Jim Darling.

Torre Cantú showed a power point presentation that was based on a report on energy development his office released earlier this year.

“Mexico is part of the dynamic energy transformation field. The economic activities related to the energy sector contribute 12.3 percent of the national GDP. These include from oil extraction, refining, transmission and distribution of electrical energy to making derivatives in petrochemical industry. In Tamaulipas, these activities contribute 20.5 percent of the state GDP,” Torre Cantú said.

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