A screen displays the logo for ConocoPhillips on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 6, 2022.
Shares of NextDecade rose 2.3% in extended trading after the announcement. The deal reflects growing demand in the LNG sector, with the U.S. positioned as the world’s largest exporter. Industry activity has been increasing as new projects move forward and financial approvals are expected this year, which could allow the U.S. to triple its LNG export capacity by 2030.
NextDecade is constructing its Rio Grande LNG facility with a capacity of 17.6 million tonnes per annum (mtpa). The company is also developing Train 4 and Train 5, which together will add 10.8 mtpa. The contract with ConocoPhillips will be on a free-on-board basis, priced against the Henry Hub benchmark. It remains subject to a positive final investment decision (FID) on Train 5, anticipated in the fourth quarter of this year.
According to NextDecade, 4.5 mtpa of LNG from Train 5 has already been sold through long-term contracts. The company said: “That is sufficient to support a positive FID on Train 5.” It confirmed that commercialization of Train 5 has been completed. LNG developers usually reach FID once they secure enough sales agreements to support financing and construction.
In addition to ConocoPhillips, NextDecade has signed similar 20-year LNG supply agreements with Saudi Aramco (2222.SE), TotalEnergies (TTEF.PA), Japan’s JERA, and EQT (EQT.N). These deals strengthen the company’s commercial foundation for expansion and reflect confidence among global buyers in the Rio Grande project.
The LNG sector in the U.S. continues to expand with multiple projects under construction. Developers are targeting international markets where demand for LNG is expected to rise. By increasing its contracted volumes, NextDecade has positioned itself to secure financing and advance construction of Train 5.
The ConocoPhillips deal marks another significant step for the Rio Grande project, which is one of the largest LNG developments in North America. With production capacity across multiple trains, the facility is expected to play an important role in supplying global markets. The contract also underscores the importance of long-term agreements in providing stability for both buyers and developers in the LNG industry.
