NEXT Inks LNG Purchase Deal With EQT, Moves Closer to Train 5 FID

NextDecade Corporation NEXT has secured a new buyer for the purchase of liquefied natural gas (LNG) from the Rio Grande LNG Train 5. EQT Corporation EQT, a U.S.-based natural gas producing company, has signed a long-term sales and purchase agreement with NEXT for the purchase of 1.5 million tons per annum (mtpa) of LNG on a free-on-board basis. The contract has a duration of 20 years.

Development of Train 4 and Train 5

Per the terms of the contract, the price of LNG supplied will be linked to the Henry Hub natural gas price. NextDecade has made significant progress toward reaching a final investment decision (FID) on Train 5 of the Rio Grande LNG project in Brownsville, TX, on which its LNG supply deal with EQT is contingent. NEXT has also mentioned that it intends to take a positive FID on Train 4 by Sept. 15, 2025. This is contingent on securing the necessary funding.

Phase 1 of the Rio Grande LNG export facility, which includes three liquefaction units, is under construction and is expected to provide a total capacity of 17.61 mtpa. Trains 4 and 5 have not reached an FID yet, but these two liquefaction trains are expected to provide a combined additional capacity of 10.8 mtpa. NEXT has secured commitments to sell 3.5 mtpa of LNG from Rio Grande Train 5 under long-term sales and purchase agreements.

Progress Toward Rio Grande LNG Train 5 FID

The company aims to secure another long-term agreement to sell 1 mtpa of LNG from Train 5 to reach a positive FID. NEXT stated that it expects to reach an FID for the fifth train by the fourth quarter of 2025. It also plans to complete the commercialization of Train 5 by the third quarter, contingent on securing adequate financing. This timeframe aligns with the extended price validity period in the fixed-price engineering, procurement and construction (EPC) contract that NEXT signed with Bechtel Inc. The EPC contract specifies a revised deadline of Nov. 15, 2025.

EQT’s LNG Strategy

EQT highlighted that the new agreement bolsters the company’s LNG strategy by diversifying its exposure to end markets with growing LNG demand. This positions EQT to realize higher prices for the commodity by linking supply to benchmark prices, thereby supporting long-term earnings growth.

Zacks Rank & Key Picks

Currently, NEXT carries a Zacks Rank #4 (Sell), while EQT carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Energy sector are Repsol S.A. REPYY and Antero Midstream Corporation AM. While Repsol sports a Zacks Rank #1 (Strong Buy), Antero Midstream carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.

Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company’s higher dividend yield, compared to its sub-industry peers, makes it an attractive choice for investors who seek consistent returns.

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This article originally published on Zacks Investment Research (zacks.com).

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