Key Highlights

  • Train 1 at Rio Grande LNG reached 79.7% overall completion as of September 2026, with first LNG production targeted for Q2 2027 — one quarter ahead of the guaranteed EPC schedule with Bechtel.
  • FERC approved an uprate for Trains 1-5 from 27 MTPA to 30.15 MTPA; USACE authorization was also received for Train 6 in record time.
  • Rio Grande LNG Phase 1 LLC completed a $3.5 billion senior secured notes offering in July 2026, plus an additional $575 million in September 2026, to repay project Credit facilities and reduce Interest Rate exposure.
  • Volume-weighted average implied margins on uncontracted volumes from Train 1 start-up through Train 5 long-term SPA delivery dates are projected to average over $6 per MMBtu, more than $1 above base case guidance.

NextDecade Corporation (NASDAQ:NEXT), the Houston-based LNG developer constructing the Rio Grande LNG export terminal near Brownsville, Texas, reported that Phase 1 construction is tracking comfortably ahead of the guaranteed completion schedule under its engineering, procurement, and construction contract with Bechtel Energy. Through September 2026, Trains 1 and 2 had reached a combined completion of 79.7% on an overall basis, with engineering and procurement effectively complete. The company now expects first LNG production from Train 1 in the second quarter of 2027 and substantial completion in the third quarter of 2027 — a full quarter ahead of the guaranteed date in the EPC contract.

Construction Progress Across Five Trains

Trains 1 and 2 led the field at 79.7% overall completion as of September 2026, with engineering at 99.5% and procurement at 99.6%. Train 1 electrical, mechanical, and Utility commissioning scopes were progressing, and installation of the Train 2 main cryogenic heat exchanger was completed during the quarter. Dredging activities for berths, the turning basin, and channel deepening were also finished. The gas inlet facilities achieved ready-for-startup status, and the Bay Runner pipeline reached in-service, leaving the Facility positioned to receive first gas before year-end 2026.

Train 3 stood at 55.2% overall completion at the end of September, while Trains 4 and 5, both of which reached positive final Investment decisions in 2025, were at 22.5% and 14.0% respectively — in line with their guaranteed EPC schedules. Foundation work for Train 4's main cryogenic rack began, and Train 5 soil stabilization via direct mixing commenced during the quarter. Together, Trains 1 through 5 are designed to produce 30 MTPA of LNG following FERC's uprate approval in September 2026, an increase from the previously authorized 27 MTPA.

Financing Completed, Uncontracted Margin Guidance Lifted

NextDecade refinanced Phase 1 LLC's project credit facilities through two Debt Capital Markets transactions. In July 2026, Phase 1 LLC issued $3.5 billion of senior secured notes across four tranches with maturities ranging from 2031 to 2041 and fixed coupons between 5.25% and 6.15%. Net proceeds were used to repay outstanding credit facility borrowings. A simultaneous reduction in notional interest rate swaps generated approximately $109.2 million in settlement receipts, which were applied to reduce the remaining outstanding credit facility balance. In September 2026, Phase 1 LLC issued a further $575 million of senior secured notes, amortizing over approximately 18.5 years from June 2029 with a final Maturity in December 2047. Train 5 LLC also completed the issuance of $500 million of 6.56% senior secured notes in total under a note purchase agreement executed alongside the Train 5 FID.

On the commercial front, management raised its guidance for volume-weighted average implied margins on uncontracted volumes. Based on current forward LNG and Natural Gas price curves, the company projects those margins to average over $6 per MMBtu from Train 1 start-up through the date of first commercial delivery under Train 5 long-term sale-and-purchase agreements, an improvement of more than $1 per MMBtu above base case guidance. The company also sold approximately 175 TBtu of LNG volumes in Q1 2026.

Train 6 Development Advances; Trains 7 and 8 Permitting to Begin

Train 6, located inside the existing levee at the Rio Grande LNG site adjacent to Trains 1 through 5, moved forward on two regulatory fronts during Q3 2026. In July, FERC issued a schedule of environmental review, with the final Environmental Impact Statement expected in June 2027. In September, the US Army Corps of Engineers granted Train 6 permit authorization — a key construction prerequisite — in what NextDecade described as record time. Commercialization discussions with potential long-term counterparties are underway, and the company is targeting a positive final investment decision for Train 6 in the second half of 2027. Separately, pre-filing with FERC for Trains 7 and 8 is expected before year-end 2026. The 1,000-acre site on the Brownsville Ship Channel has physical space for up to 10 trains.

NextDecade enters the fourth quarter of 2026 with a construction program running ahead of contractual milestones and a financing structure that no longer depends on variable-rate project debt for the first five trains. The next tangible proof points for the market will be the introduction of first gas into the facility before year-end, followed by first LNG production from Train 1 in Q2 2027 — a milestone that will move Rio Grande LNG from a project measured in completion percentages to an operating asset generating margin on every cargo.