De-risked LNG build, but execution now decides
- The first five Rio Grande LNG trains are financed, approved, and under construction.
- Trains 1 and 2 plus common facilities were 67.8% complete as of March 2026.
- First gas is expected in the second half of 2026, with first LNG production from Train 1 in the first half of 2027.
- Early cargo deals cover over 175 TBtu and target margins of over $3.00 per MMBtu.
- The main risk has moved from permits and financing to building the plant on time and on budget.
Five trains are no longer a dream
NextDecade has moved from a risky plan to a real construction story. The first five trains at Rio Grande LNG now have final investment decisions, financing, and active construction. That matters because an LNG train is the part of the plant that chills natural gas into liquid form so it can be shipped overseas.
The progress is visible. As of March 2026, Trains 1 and 2 plus common facilities were 67.8% complete. Train 3 was 44.2% complete, Train 4 was 10.6% complete, and Train 5 was 6.8% complete. Train 1 has also started early electrical commissioning.
The bull case is that the project has gained room for error. The Federal Energy Regulatory Commission, or FERC, approved 24/7 construction in April 2026, and management said this was already built into the EPC contracts with Bechtel and would not raise total project cost. Global LNG supply also looks tighter after the Iran conflict and damage at Ras Laffan, which management said may take 3 to 5 years to repair.
The bear case is simple: NextDecade still has to finish a huge build before regular cash flow arrives. The company does not expect meaningful operating cash flow until 2027. Delays, cost overruns, higher debt costs, or weak execution could still hurt the stock, even though the old permit fight for the first five trains has been resolved.
Selling liquefaction capacity
NextDecade plans to make money by turning U.S. natural gas into LNG and selling that output under long-term sale and purchase agreements, called SPAs. These contracts are meant to make cash flow more predictable because customers pay fixed fees for contracted volumes.
Before the long-term SPAs fully start, the company is marketing early cargoes from 2027 and 2028 production. In February 2026, it signed sales agreements for over 175 TBtu of LNG on a free-on-board basis. Management expects those cargoes to earn margins of over $3.00 per MMBtu, and said the volume is 33% of expected portfolio volumes from 2027 through early 2029.
The model breaks if the plant is late, costs more than planned, or cannot operate as promised. Customers want LNG, not a construction update. That is why the next key tests are first gas in the second half of 2026 and first LNG production from Train 1 in the first half of 2027.
Rio Grande is the company
Trains 1 and 2 plus common facilities
This is the most advanced part of Rio Grande LNG. It was 67.8% complete as of March 2026, with engineering 98.4% complete and procurement 94.3% complete.
Train 3
Train 3 is the next major unit in the first phase. It was 44.2% complete as of March 2026.
Trains 4 and 5
These trains reached final investment decision in 2025 and moved into construction. As of March 2026, Train 4 was 10.6% complete and Train 5 was 6.8% complete.
Expansion Trains 6 through 8
NextDecade is developing and advancing permits for Trains 6 through 8. The expansion could add about 18 MTPA of LNG capacity if built.
Early cargo marketing
These are LNG cargoes expected before the long-term SPA schedule fully starts. The February 2026 agreements cover over 175 TBtu and target margins of over $3.00 per MMBtu.
Carbon capture and storage
NextDecade is exploring carbon capture and storage at Rio Grande LNG and for third parties. This is still an option, not the main value driver today.
One main project
The Q1 2026 filing describes NextDecade as primarily engaged in construction and development of Rio Grande LNG. The mix below reflects project exposure, not a revenue split, because the company is still in the construction stage.
What could still go wrong
Construction slips
High impact · Medium oddsThe biggest risk is that Rio Grande LNG takes longer to finish than planned. Trains 1 and 2 were 67.8% complete as of March 2026, but construction itself was 49.4% complete inside that number. A missed first gas window would likely reset investor trust.
Cost overruns
High impact · Medium oddsLarge LNG plants can run over budget because of labor, equipment, weather, and contractor issues. FERC approved 24/7 construction at no added EPC or total project cost, which helps, but it does not remove all build risk. If costs rise, equity value can shrink because debt and partners get paid first.
Debt and refinancing pressure
High impact · Medium oddsNextDecade depends on large project financing and will not have regular operating cash flow until 2027. Higher interest rates or weaker credit markets could make future expansion debt more costly. This matters most for Train 6 and later trains.
Train 6 commercialization falls short
Medium impact · Medium oddsThe tighter LNG market helps NextDecade sell long-term U.S. volumes, especially after damage to supply at Ras Laffan. Still, Train 6 needs enough customer demand, permits, and financing before it can move from idea to construction. Management has pointed to a Train 6 final investment decision in the second half of 2027.
Permits are resolved, but not gone forever
Medium impact · Low oddsThe old D.C. Circuit Court overhang for the first five trains has been resolved. FERC reaffirmed authorization in August 2025, and the order was no longer appealable to FERC as of October 30, 2025. New expansion trains and carbon capture work still need their own approvals.
In one breath
What does NextDecade do?
NextDecade is building the Rio Grande LNG export facility in Brownsville, Texas. The plant will chill natural gas into liquid form so it can be loaded onto ships and sold to global buyers.
When should NextDecade start producing LNG?
Management expects first gas into the facility in the second half of 2026. It expects first LNG production from Train 1 in the first half of 2027.
Why does Train 6 matter?
Train 6 is the next expansion step after the first five trains. Management said a final investment decision in the second half of 2027 could bring Train 6 online as early as 2032.
Is the old FERC permit risk still the main issue?
No. FERC reaffirmed authorization for the first five trains in August 2025, and the order was no longer appealable to FERC as of October 30, 2025. The main issue now is execution.