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HOUSTON - NextDecade Corporation (NASDAQ: NEXT), a liquefied natural gas (LNG) development company with a market capitalization of $1.91 billion, has provided an update on its activities for the first quarter of 2025, highlighting significant progress in the expansion and commercialization of its Rio Grande LNG facility. According to InvestingPro analysis, the company faces significant financial challenges, including rapid cash burn and substantial debt obligations, though it has shown strong stock performance with a 13% return over the past year.
The company announced the expansion of the Rio Grande LNG facility to include Trains 6 through 8, which is expected to bring its total production capacity to 48 million tonnes per annum (MTPA). The pre-filing for Train 6 with the Federal Energy Regulatory Commission (FERC) is anticipated within 2025, with a full application slated for early 2026. Timelines for permitting Trains 7 and 8 will be provided later in the year. Analysts maintain a consensus buy recommendation with price targets ranging from $9 to $15, suggesting potential upside despite current operational challenges.
NextDecade also reported a favorable outcome in a D.C. Circuit Court case, which resulted in a remand without vacatur of its FERC order, allowing uninterrupted construction of Phase 1 while FERC completes a supplemental environmental impact statement (SEIS). The draft SEIS issued by FERC in March aligns with the company’s expectations.
Commercially, NextDecade has completed agreements for Train 4 with Aramco and TotalEnergies, joining ADNOC as long-term customers. These agreements, spanning 20 years, have secured sufficient commitments to proceed towards a final investment decision (FID) for Train 4. The company is also in discussions with Bechtel for a Train 5 EPC contract and plans to initiate the financing process for Train 5 following completion.
On the financial front, NextDecade has reduced its working capital facility commitments by $250 million due to decreased credit support requirements during construction, which is expected to save approximately $2 million annually in commitment fees. The company currently operates with a total debt of $4.07 billion and a concerning current ratio of 0.69, indicating potential liquidity challenges. Want deeper insights into NextDecade’s financial health? InvestingPro subscribers have access to over 10 additional key financial metrics and exclusive analysis.
The Rio Grande LNG facility, currently under construction, is expected to have an initial capacity of approximately 27 MTPA. As of March 2025, the construction of Phase 1, which includes Trains 1 through 3, is on schedule. The company has equity interests in Phase 1 that entitle it to up to 20.8% of cash distributions during operations.
NextDecade aims to make positive FIDs on Trains 4 and 5, subject to securing necessary contracts and financing. The company plans to launch the financing process for Train 4 in the second quarter of 2025 and has options in place for equity partners to invest in Train 4, potentially providing 60% of the required equity funding.
The company’s development plans also include additional liquefaction capacity beyond Trains 1 through 5, with Trains 6 through 8 expected to increase total capacity by approximately 18 MTPA.
This update is based on a press release statement issued by NextDecade Corporation. With negative EBITDA of $169.14 million in the last twelve months and significant upcoming capital requirements, investors should closely monitor the company’s financial progress. For comprehensive financial analysis and real-time updates, consider subscribing to InvestingPro, which offers exclusive insights and advanced analytical tools for informed investment decisions.
In other recent news, NextDecade Corporation has announced a significant 20-year sale and purchase agreement (SPA) with a subsidiary of Aramco for liquefied natural gas (LNG). This agreement involves the offloading of 1.2 million tonnes per annum from the proposed Train 4 of the Rio Grande LNG Facility, contingent on a positive Final Investment Decision (FID). The SPA with Aramco marks a crucial step in NextDecade’s efforts to expand its customer base and enhance its LNG project in Brownsville, Texas. In light of this development, Stifel analysts have maintained a Buy rating for NextDecade and raised the stock price target to $15, citing reduced regulatory hurdles and potential growth prospects. The analysts also anticipate that the FID for Train 4 could be made later in 2025, with the first four trains projected to generate over $500 million in EBITDA once operational. Additionally, NextDecade has begun work on Train 6, although its operations are not expected to commence until 2031. The company is also exploring a carbon capture and storage project at the site to aid in carbon reduction efforts. In a separate development, NextDecade has appointed Luke Boylston as the interim principal accounting officer following the departure of Eric Garcia, ensuring continuity in its financial management.
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