ENB Pub Note: We have reached out to the team at NextDecade for an interview with Matt Schatzman, Chairman & CEO, and will keep you posted on the updates.
A significant boost for the U.S. liquefied natural gas (LNG) sector, NextDecade Corporation has secured up to $1.8 billion in equity commitments from major players TotalEnergies and Global Infrastructure Partners (GIP) to fund the expansion of its Rio Grande LNG project in Texas.
This investment is part of a broader $3 billion equity package that includes contributions from NextDecade itself, marking a key milestone in advancing the project’s fourth liquefaction train.
Project Details and Funding Breakdown
The Rio Grande LNG facility, located near Brownsville, Texas, is poised to become one of the largest LNG export terminals in the United States. Phase 1 of the project, comprising the first three liquefaction trains, is already under construction and expected to produce up to 17 million tonnes per annum (mtpa) of LNG.
The latest funding targets Train 4, which will add approximately 5.4 mtpa of capacity, with total project costs estimated between $6 billion and $6.2 billion.
Under the agreements, TotalEnergies will invest $300 million for a 10% equity stake in Train 4.
GIP will commit $1.5 billion for a 50% stake, which could decrease to 30% if certain return-on-investment milestones are achieved.
NextDecade will contribute up to $1.2 billion, securing a 40% interest that could rise to 60% under the same conditions.
Additionally, Abu Dhabi’s ADNOC holds a 12% stake in the overall project and has a 20-year offtake agreement for LNG from Train 4, further solidifying commercial viability.
The facility stands out for its environmental credentials, featuring a carbon capture and storage (CCS) system expected to reduce emissions by over 90% and sequester more than 5 million metric tons of CO2 annually, equivalent to removing 1 million vehicles from the roads each year.
This expansion aligns with global trends toward cleaner energy transitions while capitalizing on rising LNG demand, particularly in Europe and Asia, where natural gas serves as a bridge fuel amid phasing out coal and bolstering energy security.
What This Means for Investors
For investors eyeing the energy sector, this funding injection represents a de-risking event for NextDecade (NASDAQ: NEXT), reducing reliance on debt financing and signaling strong confidence from industry heavyweights like TotalEnergies and GIP.
The partnerships not only provide capital but also bring operational expertise and market access, potentially accelerating project timelines and enhancing long-term revenue streams.Market reaction has been positive: NEXT shares rose 2.6% in after-hours trading following the announcement on August 11, 2025.
Over the past year, the stock has surged 57%, pushing the company’s market capitalization above $3 billion as of late July 2025.
Analysts maintain a “Buy” rating on NEXT, with a consensus price target of $10.00, suggesting potential upside from current levels.
However, investors should consider broader LNG market dynamics. While demand is projected to grow—driven by geopolitical shifts and energy transitions—volatility in natural gas prices, regulatory hurdles (including U.S. export approvals), and competition from other projects could pose risks. The emphasis on CCS positions Rio Grande LNG favorably in an era of tightening emissions standards, potentially attracting ESG-focused investors.
Overall, this development underscores NextDecade’s momentum in the U.S. LNG boom, offering investors exposure to a high-growth area with strategic partnerships mitigating execution risks. As the project progresses toward full commercialization, it could deliver substantial returns, though patience will be key amid construction and market uncertainties.
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