NEXT

Leadership Transition

• New CFO John Zuklic joined the company in early July 2026, bringing 30 years of energy industry experience from Citgo, to support the company's transition from LNG development to LNG operations.

Rio Grande LNG Phase 1 Construction Progress

• As of June 2026, Trains 1 and 2 are 74% complete overall, with engineering and procurement nearly finished and construction at almost 60%; commissioning activities have started. Train 3 is over 50% complete, Train 4 is 15.5% complete, and Train 5 is 9.4% complete.
• The main site substation was safely energized in May 2026, and over 100 operational employees were seconded to Bechtel in June 2026 to prepare for first production. Over 6,000 workers are on site daily, with construction progressing safely, on budget, and ahead of the original schedule.
• Bay Runner pipeline construction remains on track for in-service in 3Q 2026; the hot tap interconnect to Valley Crossing Pipeline is already complete. Dredging for the berth and turning basin is substantially complete, and channel deepening is finished. Construction of permanent site buildings is nearing completion.

Train 6 Development Progress

• Formal FERC permitting application for Train 6 was filed in May 2026, and DOE export authorization applications were submitted in June 2026. FERC has scheduled issuance of the final Environmental Impact Statement (EIS) for June 25, 2027, which supports a final investment decision (FID) in 2H 2027, contingent on sufficient commercial support and financing.
• A supply reservation agreement was executed with Baker Hughes in 2Q 2026 to secure main refrigeration compressors for Train 6. Long-term sale and purchase agreement (SPA) discussions are active with multiple high credit-quality counterparties.
• Management is targeting pre-filing for Trains 7 and 8 before the end of 2026, with formal applications targeted for 2Q 2027, final EIS in June 2028, and FID targeted for 2H 2028, one year after Train 6 FID.

Financial Transactions

• Two financing transactions closed in 2Q/early 3Q 2026 extended the maturity of Phase 1 project debt, diversified the debt maturity stack, and freed up bank capacity for future expansion: a $1 billion 7.05% term loan maturing in 2033, and a $3.5 billion 144A senior secured note issuance rated BBB- by S&P and Fitch across four tranches maturing 2031–2041.
• Net proceeds of ~$4.6 billion were used to pay down outstanding Phase 1 bank facility borrowings. The $14 billion initial order book for the notes allowed pricing at the tight end of the expected range, and unwinding related interest rate swaps generated a $109 million settlement receipt.

LNG Market Context

• The ongoing Iran conflict has removed ~20% of global LNG supply from the market, with approximately 7 million tons of annual production shut in indefinitely. Damaged trains at Ras Laffan will take years to repair, and regional expansion projects are delayed by at least a year, removing material supply from the global market through 2030 or longer.
• Global LNG supply growth to 2030 is now expected to be at or below the 20-year historical average, leading management to expect spot LNG prices will remain elevated through at least 2030. U.S. Henry Hub-indexed long-term LNG contracts are increasingly attractive to buyers due to stable, low pricing compared to other global supply sources, and demand for these contracts remains strong.

• First gas into the Rio Grande LNG facility is still expected in 2H 2026, with first LNG production from Train 1 expected in 1H 2027; construction remains ahead of the original schedule, and management expects to narrow the first production timing guidance in 4Q 2026 as commissioning progresses.
• Train 6 FID is maintained for the second half of 2027, contingent on securing sufficient commercial backing and project financing. Trains 7 and 8 FID is maintained for the second half of 2028, aligned with the permitting timeline.
• The company continues to expect to refinance the remaining Phase 1 bank facility balances ahead of project substantial completion, remaining opportunistic based on market conditions. Long-term Henry Hub-linked liquefaction fees for Train 6 are expected to remain in the $2.50-$3.00 per MMBtu range, with strong demand for volumes at these levels.
• Management maintains its projected margin of ~$5 per MMBtu for uncontracted volumes, with current forward market pricing for 2027-2028 above this guided level.

NextDecade is currently a pre-operational LNG development company, with no revenue-generating product segments active as of 2Q 2026. All activity is focused on the development and construction of the Rio Grande LNG project. General and administrative (G&A) expense includes corporate-level overhead and Rio Grande LNG general costs, while 2026 year-to-date operating and maintenance expense consists primarily of labor, property taxes, and site lease costs for pre-operational readiness, which is expected to increase as first production approaches. Two LNG new-build vessels were delivered in 2Q 2026, with one more remaining to be delivered by the end of 2026. The company sub-charters excess vessel capacity to third parties, with income offsetting operating and maintenance expense.

• Ongoing geopolitical conflict in the Middle East creates sustained volatility in global LNG markets, and extended hostilities could lead to further supply disruptions and higher-than-expected price volatility.
• Unexpected delays during the commissioning and startup process for Train 1 could push back first LNG production beyond the current 1H 2027 guidance range.
• Increasing labor competition for construction resources along the U.S. Gulf Coast could potentially push up EPC costs or delay construction for future expansion phases, though management has not experienced issues to date.
• Sufficient commercial demand and project financing for Train 6 is required to achieve the planned 2H 2027 FID; failure to secure both could delay or cancel the expansion.
• Extended volatility in global natural gas and LNG pricing could impact contracting activity and project returns for both existing Phase 1 and planned expansion capacity.

Q: What key commissioning milestones should investors watch for before first gas and first LNG, and when will guidance be narrowed for these milestones? / A: Key upcoming milestones include completion of the first LNG tank by the end of 2026 and completion of the Bay Runner pipeline in the third quarter of 2026. Most remaining pre-commissioning work (hydrostatic testing, insulation, etc.) is progressing ahead of schedule. Management expects to provide narrowed timing guidance for first LNG production in the fourth quarter of 2026, after gaining more clarity from initial commissioning activities.

Q: How has the Middle East conflict changed buyer interest for Train 6 volumes, and when can we expect new SPA announcements? / A: Conflict-driven supply disruptions have only increased buyer interest in reliable U.S. LNG supplies, with more competition for available Train 6 volumes than before the conflict. New SPA activity is expected over the next six months, sequenced to align with the targeted second half 2027 FID for Train 6, with confirmed FERC permitting now aligned to this timeline. Management is willing to wait for improved pricing if market conditions continue to strengthen, rather than rushing contracts.

Q: How does NextDecade’s gas sourcing position impact margins and contracting strategy? / A: NextDecade sources gas at the Agua Dulce hub in South Texas, which currently trades at a persistent discount to Henry Hub (the index used for nearly all of the company’s LNG contracts), due to growing Permian and Eagle Ford basin production. This structural discount is expected to persist long-term, supporting higher margins than many competing LNG projects. Forward pricing for uncontracted 2027-2028 volumes is currently above the company’s guided $5 per MMBtu margin, and the company will not rush to lock in long-term back-end prices given the high probability of sustained elevated prices from reduced global supply.

Q: What is NextDecade’s approach to acquiring minority interests in existing Phase 1 trains from current partners? / A: Management prefers to acquire additional capacity rather than sell existing stakes, and will evaluate opportunities to purchase additional interests in Phase 1 (including Trains 4 and 5) as they arise, since partners often do not hold positions long-term over the full 20+ year project lifespan. Acquiring additional operating interests from partners is a low-capital way to grow future distributable cash flow per share, aligned with the company’s growth strategy.

Q: How is NextDecade impacted by growing Gulf Coast construction labor competition? / A: The Rio Grande Valley location offers a unique advantage: many local skilled workers previously had to travel to other Gulf Coast hubs for work, and the multi-decade construction pipeline for NextDecade’s project allows workers to stay local long-term. Bechtel uses a direct hiring model, and the company has not experienced any issues ramping up to over 6,000 workers to date, even as other projects have started construction in the region.