Oct 29, 2026 earnings call — Rio Grande LNG startup and financing update
Management narrowed first LNG production guidance to Q2 of 2027.
EPS $-0.54 (est $-0.71)
Key quotes
"We now expect first LNG production in Q2 of 2027, and substantial completion of Train 1 in Q3 of 2027, which is one quarter ahead of the guaranteed schedule in our EPC contract with Bechtel."
"We expect to advance long-term Train 6 offtake discussions while permitting proceeds, with the goal of securing sufficient commercial support to enable a positive final investment decision, or FID, in the second half of next year."
"As we mentioned on our last call, in July, Rio Grande LNG, LLC issued $3.5 billion of senior secured notes in its inaugural 144A offering."
Analyst Q&A 6
timing for first LNG and completion
Q (Olivia Foster · Goldman Sachs): Analyst asked for milestones that support the Q2 2027 first LNG target and the timing from first gas through first LNG to substantial completion of Train 1.
A: They narrowed guidance: first gas into the facility is expected in the fourth quarter of this year, first LNG production in Q2 of 2027, and Train 1 substantial completion in Q3 of 2027, one quarter ahead of the EPC guaranteed schedule. Management said they will provide more specific months as they approach first LNG.
"We now expect first LNG production in Q2 of 2027, and substantial completion of Train 1 in Q3 of 2027, which is one quarter ahead of the guaranteed schedule in our EPC contract with Bechtel." — Matt Schatzman (CEO·CHAIR)
selling ramp-up volumes; Train 6 financing
Q (Doug Irwin · Citi): Analyst asked if NextDecade might sell additional ramp-up volumes to capture current spreads and then asked for the firm’s latest expectations for financing Train 6 and next milestones.
A: They said the slide shows 1,100 TBtu of available uncontracted volume during the ramp-up and that they are comfortable being long that amount rather than forward selling more today. For Train 6 financing, they expect to contract a large portion with long-term, investment-grade SPAs, maximize project-level non-recourse FinCo debt, refinance existing bank capacity, and fund the remainder with equity or convertible instruments while remaining open to strategic JV partners.
"We're very, very comfortable with being long 1,100 TBtu during this period of time." — Matt Schatzman (CEO·CHAIR)
margins on sold volumes and cash flow
Q (Jason Gabelman · TD Cowen): Analyst asked whether the 175 TBtu already sold aligns with the $6 per MMBtu margin and also asked how cash flow will be distributed from Rio Grande up to NextDecade at startup.
A: They said the margins on the 175 TBtu sales were expected to be north of $3 and those sales are included in the weighted average $6 margin figure. On cash flow, they said cash stays in the project companies until contractual milestones are met, distributions first pay down FinCo and SuperFinCo debt, and after refinancing and meeting debt targets any excess cash could fund later trains or be distributed to shareholders, with guidance cases of $2 billion at $5 margins and about $2.4 billion at current forward curves.
"On the first question about the 175 TBtu, you will recall we disclosed that when we did those, the margins that we expected to achieve on that were north of $3." — Matt Schatzman (CEO·CHAIR)
types of customers and Train 7-8 plan
Q (Wade Suki · Capital One): Analyst asked what types of counterparties are showing interest (consumers, portfolio players, regions) and asked whether Trains 7 and 8 will be sequenced or developed together.
A: They said interest comes from all types of buyers and that customers are increasingly focused on reliability and certainty of supply in addition to price. They also said Trains 7 and 8 are one project built together (not one train at a time), will include another berth and possibly one or two tanks on the western side, and Trains 9 and 10 would be on the east side if pursued later.
"All of our customers are very focused on the reliability, the certainty of supply, as well as price." — Matt Schatzman (CEO·CHAIR)
contract length and debottlenecking plans
Q (Alexander Bidwell · Webber): Analyst asked about appetite for long tenor SPAs (20+ years) and about the timing and approach to debottlenecking Trains 1–5.
A: They said contract tenor is coalescing around 20 years as the standard, with some customers seeking 10–15 years and very long tenors being exceptions. For debottlenecking, they said a team is already focused on optimizations and that once operations are turned over they will prioritize low-cost fixes immediately and, if justified, work capital improvements into construction for Trains 4, 5, and 6.
"I think the tenor is still coalescing around 20 years, is the standard contract." — Matt Schatzman (CEO·CHAIR)
short-term hedging and basis differential
Q (Craig Shere · Tuohy Brothers): Analyst asked whether NextDecade might sell the nearer-term 275 TBtu to aid Train 6 financing and whether the $6+ netback assumes any advantaged feedstock or basis differential.
A: They said the margin calculation already takes a snapshot of all costs, including gas cost, and that the basis differential could widen or narrow. They also said they prefer to remain long rather than hedge too much given startup risk and current market volatility, and they view some Qatari volumes as potentially unreliable so being long through uncertainty is valuable.
"I'd say that basis diff, as we've said before, when we look at our margins, we've taken a snapshot of everything that's in the margin of producing LNG, including the gas cost." — Matt Schatzman (CEO·CHAIR)