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The LNG developer is currently building three trains at the site located on the north shore of the Brownsville Ship Channel in south Texas, and is working to make final investment decisions on trains 4 and 5.
“We are working with multiple potential commercial counterparties to progress trains 4 and 5 toward positive final investment decisions (FIDs), and we believe we are well positioned to secure commercial support for both trains,” NextDecade’s chairman and CEO Matt Schatzman said in an update on Friday.
He also announced development plans for expansion capacity at the Rio Grande LNG facility site beyond trains 1 through 5.
“We are currently developing and preparing to start the permitting process for train 6 and starting the development of trains 7 and 8. Train 6 is being developed inside the existing levee at the site, which is expected to provide advantages in site preparation and expected economics,” Schatzman said.
NextDecade plans to pre-file an application with the Federal Regulatory Energy Commission (FERC) for Train 6 this year.
“Trains 7 and 8 are being developed on the site outside of the existing levee. Additionally, we expect to explore options for the development of up to two additional trains at our site beyond train 8,” he said.
Trains 6 through 8 are wholly owned by NextDecade and are cumulatively expected to increase the company’s total liquefaction capacity by about 18 mtpa once constructed and placed into operation.
First Rio Grande LNG phase
In July 2023, NextDecade took the final investment decision on the first three Rio Grande trains and completed a $18.4 billion project financing.
NextDecade awarded the $12 billion EPC contract to Bechtel, and it officially kicked off work on the plant in October 2023.
The firm also closed a joint venture agreement for the first phase which included about $5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala, and TotalEnergies.
NextDecade holds equity interests in the Phase 1 joint venture that entitle it to receive up to 20.8 percent of the distributions of available cash during operations.
Phase 1, with nameplate liquefaction capacity of 17.6 mtpa, has 16.2 mtpa of long-term binding LNG sale and purchase agreements.
These include deals with TotalEnergies, Shell, ENN, Engie, ExxonMobil, Guangdong Energy Group, China Gas Hongda Energy Trading, Galp, and also Itochu.
Construction progress
Besides three liquefaction trains, the first phase includes two 180,000-cbm full containment LNG storage tanks, and two jetty berthing structures designed to load LNG carriers up to 216,000 cubic meters in capacity.
As of January 2025, progress on Trains 1 through 3 is “in line” with the schedule under the EPC contracts, NextDecade said in the update.
Under the EPC contracts with Bechtel, Phase 1 progress is tracked for train 1, train 2, and the common facilities on a combined basis, and train 3 on a separate basis.
As of January 2025, he overall project completion percentage for trains 1 and 2 and the common facilities of the Rio Grande LNG Facility was 38.1 percent, NextDecade said.
Within this project completion percentage, engineering was 84.9 percent complete, procurement was 69.2 percent complete, and construction was 10.6 percent complete.
NextDecade said the overall project completion percentage for train 3 was 15.3 percent complete.
Within this project completion percentage, engineering was 33.5 percent complete, procurement was 32.8 percent complete, and construction was 0.4 percent complete.
“During the fourth quarter and early 2025, the construction team continued steel assembly in the train 1 area and adjacent pipe racks. Within train 2, foundations were progressed and steel assembly began. Tank 1 roof panels were set in place, and the first wall concrete pour for tank 2 was completed,” the company said.
Across the site, Bechtel’s work also continues on installing underground structures, loading berths, piling, concrete foundations, and other siteworks.
Bechtel has materially completed purchase orders for critical and high-value items for Phase 1, NextDecade said.
Trains 4 and 5
Including trains 4 and 5, the Rio Grande LNG facility would have a capacity of 27 mtpa.
In August 2024, NextDecade signed a lump sum turnkey EPC contract with Bechtel for the construction of the fourth train and related infrastructure at the Rio Grande LNG facility.
The company’s unit Rio Grande LNG Train 4 agreed to pay Bechtel about $4.3 billion for the work under the EPC contract.
Total estimated project costs are expected to be $6-$6.2 billion for train 4 and related infrastructure, in line with the per train cost of the three-train Phase 1 at the Rio Grande LNG facility.
“The company continues to advance commercial discussions with multiple potential counterparties and expects to finalize commercial arrangements for train 4 in the coming months to support a positive FID on train 4,” NextDecade said.
NextDecade entered into an LNG SPA with Adnoc for the sale of 1.9 mtpa of LNG from train 4, as well as a non-binding heads of agreement (HoA) with Aramco for a 20-year SPA for the sale of 1.2 mtpa of LNG from train 4.
The company said it is working with Aramco to finalize a binding SPA.
Additionally, an affiliate of TotalEnergies has an LNG purchase option of 1.5 mtpa for train 4, and NextDecade expects TotalEnergies to exercise the option.
NextDecade said it is also progressing the development and commercialization of train 5.
TotalEnergies holds an LNG purchase option for 1.5 mtpa for train 5, and the Rio Grande Phase 1 equity partners have options to invest in train 5 equity which are identical to their options to participate in train 4 equity.
According to NextDecade, train 5 EPC contract with Bechtel is expected to be finalized in 2025.
Regulatory actions
In October 2024, NextDecade sought a rehearing of the D.C. Circuit Court’s ruling on its Rio Grande LNG project in Texas.
Prior to that, the US Court of Appeals for the D.C. Circuit issued an order vacating the Federal Energy Regulatory Commission’s remand authorization of NextDecade’s Rio Grande LNG facility on the grounds that the FERC should have issued a supplemental environmental impact statement (EIS) during its remand process.
The Court’s decision will not become effective while the appeals process is ongoing.
In September 2024, FERC said it will prepare a supplemental environmental impact statement for the Rio Grande LNG project.
In the meantime, Donald Trump became the new US President and already made significant moves related to the US LNG industry.
Trump lifted a moratorium by the former Biden administration on non-FTA LNG export permits in January this year.
He issued the executive order, which was widely expected, just hours after officially taking over his second four-year term as the president.
“The company expects to take all available legal and regulatory actions, including appellate actions, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals will be maintained to enable a positive FID on trains 4 and 5 at the Rio Grande LNG facility,” NextDecade said.
