NextDecade shares jump 14% as first LNG production expected in Q2 2027

Key Facts

NextDecade shares jumped 14% on October 29, according to TIKR, after the company said it expects to begin producing its first liquefied natural gas from Train 1 in Q2 2027. The company expects the train to reach substantial completion in Q3 of the same year, one quarter ahead of the completion date guaranteed under the engineering, procurement and construction contract. The schedule distinguishes between the start of production and completion of the work; the latter date does not mean production will begin in Q3. In its third-quarter update, the company said work on Phase 1 of the Rio Grande LNG facility continued to progress on budget and ahead of schedule. NEXT closed at $6.51 on October 28, according to EL7 data, the day before the rise reported by TIKR.

Company data through September showed overall completion of Trains 1 and 2 at 79.7%, with 68.8% of construction complete and 4.9% of commissioning complete. Work on electrical and mechanical commissioning and utilities continued on Train 1, while installation of the main cryogenic heat exchanger was completed on Train 2. Overall completion for Train 3 was about 55.2%, while Train 4 was 22.5% complete and Train 5 was 14.0% complete. The figures put the later trains at varying stages of progress, while the announced production date remains tied to Train 1. The company said Phase 1 work was progressing safely and on budget, as well as ahead of schedule.

NextDecade estimated that the volume-weighted average implied margin would exceed $6 per MMBtu for uncontracted volumes from the start of Train 1 through the first commercial delivery under Train 5 contracts, including about 175 TBtu it sold in Q1 2026. The company said the estimate is more than $1 per MMBtu above its base-case guidance. The calculation, according to the company, is based on current forward LNG prices and U.S. natural gas prices, and is therefore linked to those prices over the period in question. The company attributed the strength in spot LNG prices to the loss of supply from the Middle East. The estimate includes Q1 sales and uncontracted volumes during the specified period; it is not a realized margin on the project’s full future output.

On capacity, the U.S. Federal Energy Regulatory Commission approved an increase in September 2026 in the authorized capacity of the first five trains, from 27 million tons per year to 30.15 million tons per year. The company also received a permit from the U.S. Army Corps of Engineers for Train 6 in September, a key regulatory authorization required for construction. The commission’s page shows the Train 6 expansion is still at the application stage and includes adding one liquefaction train and one marine berth to the authorized terminal. The commission expects to issue the project’s final environmental impact statement in June 2027. The company aims to advance Train 6 toward a positive final investment decision in the second half of 2027, while beginning the commission permitting process for Trains 7 and 8 in Q4 2026.

Phase 1’s structure also includes financing that was rearranged in July 2026, when Phase 1 LLC issued $3.5 billion in aggregate principal amount of senior secured notes. The company used the net proceeds to repay about $3.5 billion of borrowings outstanding under the project’s credit facilities, in addition to fees and expenses. NextDecade’s interest in the Phase 1 joint venture entitles it to receive up to 20.8% of available cash distributions during operations. The Rio Grande LNG site is near Brownsville in Texas’ Rio Grande Valley, on about 1,000 acres leased under a long-term agreement. The site extends about 15,000 feet along the Brownsville Ship Channel, according to company data.

The Rio Grande LNG terminal remains under construction, while the Train 6 expansion is at the application stage with the regulator. The company’s schedule puts the start of Train 1 production in Q2 2027, followed by substantial completion in Q3, while subsequent development is tied to the expected final investment decision for Train 6 in the second half of 2027. The nearer-term regulatory steps include starting the permitting process for Trains 7 and 8 in Q4 2026. The company also expects initial gas deliveries to the facility to continue before the end of 2026. It said the gas inlet facilities were ready for operation during the third quarter and that the Bay Runner pipeline entered service.