ConocoPhillips will purchase LNG from NextDecade Rio Grande Train 5 Project

ConocoPhillips, a U.S. oil producer and gas exporter, will buy 1.0 million tonnes of liquefied gas per year from NextDecade Rio Grande's Texas export facility for 20 years.

NextDecade, also known by the name of a train or its fifth liquefaction plant, will provide superchilled fuel at Rio Grande from their fifth liquefaction unit.

The shares of the LNG producer increased 2.3% during extended trading.

Since President Donald Trump lifted the pause on new permits for exports in January, there has been a boom in commercial activity in the U.S. Liquefied Natural Gas sector. The previous administration had imposed a freeze on new export permits in 2024 to allow for an evaluation of public interest criteria. This was lifted shortly after Trump's election.

The U.S., which is the largest LNG exporter in the world, could triple its export capability by 2030.

NextDecade is building its Rio Grande facility, which has a capacity to produce 17.6 mtpa. It also plans to develop its Train 4 and 5, with an additional combined capacity of 10.8mtpa.

The agreement will be free-onboard at a price index to Henry Hub. This is subject to the final investment decision being positive on Train 5 which is expected to happen in the fourth quarter.

NextDecade announced that it had sold a total 4.5 mtpa LNG under agreements of 20 years. According to the company this is enough to support a positive final investment decision on Train 5. The company has finished the commercialization for Train 5.

Once they have enough contracts to finance the project, LNG developers usually reach a FID for their projects.

NextDecade signed similar agreements with the top oil producer Saudi Aramco as well as TotalEnergies and Japan's largest power generator JERA. (Reporting and editing by Shilpa Majumdar in Bengaluru)

(source: Reuters)