What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-01 compared with 2025-05-06 · 83 added, 52 removed, 160 unchanged (46% of the section changed)

49 unchanged sentences

The Rio Grande LNG Facility has received Federal Energy Regulatory Commission ("FERC") approval and Department of Energy ("DOE") FTA and non-FTA authorizations for the construction of up to five liquefaction trains and LNG exports totaling up to 27 million tonnes per annum ("MTPA").

The Rio Grande LNG Facility has three liquefaction trains and related infrastructure ("Phase 1") under construction, Train 4 has been commercialized and is being progressed toward a final investment decision ("FID"), and Train 5 is being commercialized.

We are also developing and beginning the permitting process for expansion Trains 6 through 8 at the Rio Grande LNG Facility and developing a potential carbon capture and storage ("CCS") project at the Rio Grande LNG Facility.

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(“Bechtel”), Phase 1 progress is tracked for Train 1, Train 2, and the common facilities on a combined basis and Train 3 on a separate basis.

As of March 2025:

As of June 2025:

• The overall project completion percentage for Trains 1 and 2 and the common facilities of the Rio Grande LNG Facility was 48.3%, which is in line with the schedule under the EPC contract.

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A pre-filing application with FERC for Train 6 is expected in 2025, and a full FERC application is expected in early 2026.

◦ Trains 7 and 8, with a total expected LNG production capacity of approximately 12 MTPA, are being developed on the site outside of the existing levee.

◦ The Company is evaluating multiple areas on the site for the development of Trains 7 and 8, with a total expected LNG production capacity of approximately 12 MTPA.

Strategic and Commercial

• In January 2025, the Company requested a pricing refresh under the August 2024 EPC contract with Bechtel for Train 4 and related infrastructure.

The pricing refresh is in process and is expected to be completed in the second quarter of 2025.

• In April 2025, the Company announced a 20-year LNG Sale and Purchase Agreement (“SPA”) with a subsidiary of Saudi Aramco (“Aramco”), pursuant to which the Aramco subsidiary will purchase 1.2 MTPA of LNG from Train 4 at the Rio Grande LNG Facility for 20 years, on a free on board (“FOB”) basis at a price indexed to Henry Hub, subject to a positive FID on Train 4.

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The Company believes sufficient long-term commercial support is now in place to support a positive FID on Train 4.

• In May 2025, the Company announced a 20-year LNG SPA with JERA, pursuant to which JERA will purchase 2.0 MTPA of LNG from Train 5 at the Rio Grande LNG Facility for 20 years, on an FOB basis at a price indexed to Henry Hub, subject to a positive FID on Train 5.

• In June 2025, the Company finalized a pricing refresh of the Company's lump-sum, turnkey EPC contract with Bechtel for the construction of Train 4 and related infrastructure and executed a lump-sum, turnkey EPC contract with Bechtel for the construction of Train 5 and related infrastructure.

Pricing validity under the Train 4 and Train 5 EPC contracts extends through September 15, 2025.

• In April 2025, Rio Grande LNG, LLC (“Rio Grande”) elected to terminate $250 million of commitments under its working capital facility due to a decrease in expected requirements for credit support during construction, which reduced the outstanding commitments under the working capital facility to $250 million and is expected to reduce related commitment fees by approximately $2 million annually.

• In May 2025, the Company’s wholly-owned subsidiary Rio Grande LNG Super Holdings, LLC, entered into an amended credit agreement with the lender of its existing senior secured loan to increase the loan amount by $50

million to a total of $225 million initial principal.

Incremental proceeds from the senior secured loan were disbursed at closing on May 14, 2025, and net proceeds will be used to fund working capital and general corporate purposes, including development expenses for expansion trains at the Rio Grande LNG Facility and specifically pre-FID expenses for Trains 4 and 5.

Borrowings under the senior secured loan bear interest at 12.0%, with interest payable quarterly.

Interest may be paid in-kind until March 31, 2027 and up to 50% in-kind thereafter.

The senior secured loan matures December 31, 2030.

• In conjunction with the closing of the May 2025 amendment to the senior secured loan, the Company issued warrants that are exercisable for an aggregate of approximately 2.0 million shares of NextDecade common stock to the lender of the senior secured loan.

The warrants are exercisable for five years after the amendment date.

The warrants are exercisable at $9.30 per share, which represented a 30% premium to the volume weighted average price for the 30 trading-day period immediately preceding the amendment date.

• In March 2025, the U.S.

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Pursuant to the remand, FERC is to consider the issue of a supplemental Environmental Impact Statement (“SEIS”) in view of several executive orders issued since January 20, 2025.

• In March 2025, the FERC issued a draft SEIS for the first five liquefaction trains at the Rio Grande LNG Facility.

A final SEIS is expected in July 2025.

• In March 2025, the FERC issued a draft SEIS for the first five liquefaction trains at the Rio Grande LNG Facility, providing for a public comment period that ended on May 19, 2025.

• In July 2025, the FERC issued a final SEIS for the first five liquefaction trains at the Rio Grande LNG Facility.

Based on its published schedule, FERC anticipates issuing a final order on the remand by November 20, 2025.

Rio Grande LNG Facility Activity

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We are constructing and developing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel in south Texas.

The site is located on 984 acres of land which has been leased long-term and includes 15,000 feet of frontage on the Brownsville Ship Channel.

The site is located on approximately 1,000 acres of land, which has been leased long-term and includes 15,000 feet of frontage on the Brownsville Ship Channel.

We believe the site is advantaged due to its proximity to abundant natural gas resources in the Permian Basin and Eagle Ford Shale, access to an uncongested waterway for vessel loading, and location in a region that has historically been subject to fewer and less severe weather events relative to other locations along the U.S.

The Rio Grande LNG Facility has been permitted by the FERC and authorized by the DOE to export up to 27 MTPA of LNG from up to five liquefaction trains.

Please see "Significant Recent Developments - Regulatory" for more information regarding our FERC permit.

Phase 1 at the Rio Grande LNG Facility is under construction, Train 4 has been commercialized and is being progressed toward FID, Train 5 is being commercialized, and we are developing and beginning the permitting process for Trains 6 through 8.

Phase 1 at the Rio Grande LNG Facility is under construction, Train 4 has been commercialized and is being progressed toward FID, Train 5 is being commercialized and progressed toward FID, and we are developing and beginning the permitting process for Trains 6 through 8.

Phase 1 Overview and Construction Progress

In July 2023, construction commenced on Phase 1 of the Rio Grande LNG Facility following a positive FID and the closing of project financing by Rio Grande, which owns Phase 1 of the Rio Grande LNG Facility.

Construction will be completed by Bechtel under fully wrapped, lump-sum turnkey EPC contracts, and the liquefaction trains will utilize Air Products and Chemicals, Inc.

(“APCI”) liquefaction technology, which is the predominant liquefaction technology utilized globally.

Construction will be completed by Bechtel under fully wrapped, lump-sum turnkey EPC contracts, and the liquefaction trains will utilize Honeywell liquefaction technology, which is the predominant liquefaction technology utilized globally.

Pursuant to a joint venture agreement with equity partners for ownership of Rio Grande, we expect to receive up to approximately 20.8% of distributions of available cash generated from Phase 1 operations, provided that a majority of the cash distributions to which we are otherwise entitled will be paid for any distribution period only after our equity partners receive an agreed distribution threshold in respect of such distribution period and certain other deficit payments from prior distribution periods, if any, are made.

Phase 1 includes three liquefaction trains with a total expected LNG production capacity of approximately 18 MTPA, two 180,000 cubic meter full containment LNG storage tanks, two jetty berthing structures designed to load LNG carriers up to 216,000 cubic meters in capacity, and associated site infrastructure and common facilities including feed gas pretreatment facilities, electric and water utilities, two totally enclosed ground flares for the LNG tanks and marine facilities, two ground flares for the liquefaction trains, roads, levees surrounding the entire site, and warehouses, administrative, operations control room and maintenance buildings.

As of March 2025, progress on Trains 1 through 3 is in line with the schedule under the EPC contracts.

During the first quarter 2025, the construction team continued steel assembly and progressed above-ground piping and setting of equipment in the Train 1 area.

Within Train 2, foundation pours and steel assembly continued to progress.

Concrete pours for Tanks 1 and 2 continued.

First steel for Train 3 was placed in April 2025.

Siteworks were finished for the material offload facility area to support equipment deliveries.

Across the site, Bechtel also continued installing undergrounds, structures, loading berths, piling, concrete foundations, and other siteworks.

As of June 2025, progress on Trains 1 through 3 is in line with the schedule under the EPC contracts.

During the second quarter 2025, the construction team continued piping fabrication, rebar installation, equipment setting and concrete placement, and structural steel erection in the areas of Trains 1, 2, and 3.

The eighth wall lift was completed for Tank 1.

Across the site, Bechtel also continued installing concrete foundations, instrument air receivers, floodgates, permanent fencing, temporary facilities, and other siteworks.

Phase 1 LNG Sale and Purchase Agreements

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Engineering, Procurement and Construction ( “ EPC ”)

Rio Grande entered into fully wrapped, lump-sum turnkey contracts with Bechtel, a well-established and reputable LNG engineering and construction firm, for the engineering, procurement, and construction of Phase 1, and one of our wholly-owned subsidiaries entered into a corresponding contract in regards to Train 4 at the Rio Grande LNG Facility, under which Bechtel has generally guaranteed cost, performance, and schedule.

Under the Phase 1 and Train 4 EPC contracts, Bechtel is responsible for the engineering, procurement, construction, commissioning, and startup of liquefaction trains and their respective related infrastructure.

The Company has entered into fully wrapped, lump-sum turnkey contracts with Bechtel, a well-established and reputable LNG engineering and construction firm, for the engineering, procurement, and construction of Phase 1, Train 4, and Train 5 at the Rio Grande LNG Facility, under which Bechtel has generally guaranteed cost, performance, and schedule.

Under these EPC contracts, Bechtel is responsible for the engineering, procurement, construction, commissioning, and startup of liquefaction trains and their respective related infrastructure.

On July 12, 2023, Rio Grande issued final notice to proceed to Bechtel under the EPC contracts for Phase 1.

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We believe our proximity to major reserve basins and shale plays, increasing pipeline capacity in the area, a significant amount of natural gas production and infrastructure investment, as well as our existing contacts and discussions with some of the largest regional operators, represent key elements of a comprehensive and effective feed gas strategy.

Final Investment Decision on Train 4 and Train 5 at the Rio Grande LNG Facility

We expect to make a positive FID and commence construction on Trains 4 and 5 and related infrastructure at the Rio Grande LNG Facility, subject to, among other things, entering into EPC contracts, entering into appropriate commercial arrangements, and obtaining adequate financing to construct each train and related infrastructure.

The Company has finalized 20-year LNG SPAs totaling 4.6 MTPA of LNG with ADNOC, Aramco, and TotalEnergies in support of Train 4, and the Company believes sufficient commercial support is now in place to support a positive FID on Train 4.

The Company has finalized an EPC contract with Bechtel for Train 4 and related infrastructure.

In January 2025, the Company requested a pricing refresh under Train 4 EPC contract, which is in process and is expected to be completed in the second quarter of 2025.

The Company expects to finance construction of Train 4 utilizing a combination of debt and equity funding.

The Company expects to enter into bank facilities for the debt portion of the funding.

In connection with consummating the Rio Grande Phase 1 equity joint venture, the Company's equity partners each have options to invest in Train 4 equity, which, if exercised, would provide approximately 60% of the equity funding required for Train 4.

Inclusive of these options, NextDecade currently expects to fund 40% of the equity commitments for Train 4, and to have an initial economic interest of 40% in Train 4, increasing to 60% after its equity partners achieve certain returns on their investments in Train 4.

The Company expects to launch the financing process for Train 4 in the second quarter of 2025 and expects to make a positive FID on Train 4 after financing arrangements are finalized.

The Company is also progressing the development and commercialization of Train 5.

TotalEnergies holds an LNG purchase option for 1.5 MTPA for Train 5, and the Rio Grande Phase 1 equity partners have options to invest in Train 5 equity which are identical to their options to participate in Train 4 equity.

Final Investment Decision on Train 4

The Company has completed commercialization of Train 4 and has executed 20-year LNG SPAs totaling 4.6 MTPA of LNG with ADNOC, Aramco, and TotalEnergies in support of Train 4.

In June 2025, the Company finalized an EPC contract pricing refresh with Bechtel for Train 4 and related infrastructure.

Pricing validity under the EPC contract for Train 4 extends through September 15, 2025.

The Company launched the financing process for Train 4 in June 2025 and expects to finance construction of Train 4 using a combination of debt and equity funding at the project level.

The Company is in the process of entering into a term loan bank facility at Rio Grande LNG Train 4, LLC for the debt portion of the funding.

The Company's Phase 1 equity partners each have options to invest in Train 4 equity which, if exercised, would provide 60% of the equity funding required for Train 4.

The Company expects the Phase 1 equity partners to exercise their options to participate in Train 4 equity.

NextDecade currently expects to fund 40% of the equity commitments for Train 4, and to have an initial economic interest of 40% in Train 4, which will increase to 60% after its equity partners achieve certain returns on their investments in Train 4.

The Company is in the process of financing its equity capital for Train 4.

The Company expects to achieve a positive FID on Train 4 by mid-September 2025, subject to obtaining adequate financing.

Final Investment Decision on Train 5

The Company is also progressing Train 5 toward FID, and the commercialization process is underway for Train 5.

In May 2025, the Company announced a 20-year LNG SPA with JERA for 2.0 MTPA of LNG in support of Train 5.

The Company is targeting an additional 2.5 MTPA of long-term contracts to support a positive FID of Train 5.

In June 2025, the Company finalized an EPC contract with Bechtel for Train 5 and related infrastructure.

Pricing validity under the EPC contract for Train 5 extends through September 15, 2025.

The Company began the financing process for Train 5 in the second quarter of 2025 and expects to finance construction of Train 5 using a combination of debt and equity funding at the project level.

The Company expects to enter into bank facilities at Rio Grande LNG Train 5, LLC for the debt portion of the funding.

Certain of the Company’s Phase 1 equity partners have options to invest in Train 5 equity, which if exercised, would provide 50% of the equity funding required for Train 5.

Inclusive of these options, NextDecade currently expects to fund the balance of the equity commitments for Train 5, and to have an initial economic interest of up to 50% in Train 5, which will increase to up to 70% after its equity partners achieve certain returns on their investments in Train 5.

The Company continues to pursue financing for Train 5 and, subject to obtaining appropriate commercial support and financing, is targeting FID by mid-September 2025.

Development of Additional Liquefaction Capacity

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The Company expects to pre-file an application with FERC for Train 6 in 2025 and a full application with FERC in early 2026.

Trains 7 and 8 are being developed on the site outside of the existing levee.

The Company is evaluating multiple areas on the site for the development of Trains 7 and 8 and expects to provide an update on the expected permitting timeline for Trains 7 and 8 in 2025.

Governmental Permits, Approvals and Authorizations

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Pursuant to the remand, FERC is to consider the issue of a supplemental Environmental Impact Statement (“SEIS”) in view of several executive orders issued since January 20, 2025.

In March 2025, the FERC issued a draft SEIS for the first five liquefaction trains at the Rio Grande LNG Facility.

A final SEIS is expected in July 2025.

In March 2025, the FERC issued a draft SEIS for the first five liquefaction trains at the Rio Grande LNG Facility, providing for a public comment period that ended on May 19, 2025.

In July 2025, the FERC issued a final SEIS for the first five liquefaction trains at the Rio Grande LNG Facility.

Based on its published schedule, FERC anticipates issuing a final order on the remand by November 20, 2025.

Corporate and Other Activities

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Phase 1 FID Rio Grande Financing

In connection with the FID on Phase 1 of the Rio Grande LNG Facility, Rio Grande obtained approximately $6.2 billion in equity capital commitments, inclusive of commitments from the NextDecade Member, entered into senior secured non-recourse bank credit facilities of $11.6 billion, consisting of $11.1 billion in construction term loans and a $500 million working capital facility, and closed a $700 million senior secured non-recourse private notes offering.

In connection with the FID on Phase 1 of the Rio Grande LNG Facility, Rio Grande obtained approximately $6.2 billion in equity capital commitments, inclusive of commitments from NextDecade, entered into senior secured non-recourse bank credit facilities of $11.6 billion, consisting of $11.1 billion in construction term loans and a $500 million working capital facility, and closed a $700 million senior secured non-recourse private notes offering.

Rio Grande expects to utilize these capital resources to fund the total cost of Phase 1, which is currently estimated at $18.0 billion and consists of EPC costs, owner’s costs and contingencies, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland and wildlife habitat area and installation of utilities, and interest during construction and other financing costs.

Rio Grande has refinanced a total of over $1.85 billion of the original $11.1 billion Rio Grande term loan facilities into senior secured notes and loans since July 2023.

In April 2025, Rio Grande elected to terminate $250 million of commitments under its working capital facility due to a decrease in expected requirements for credit support during construction, which reduced the outstanding commitments under the working capital facility to $250 million.

Near Term Liquidity and Capital Resources of NextDecade Corporation

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There can be no assurance that we will succeed in selling equity or equity-based securities or, if successful, that the capital we raise will not be expensive or dilutive to stockholders.

Our current capital resources consist of approximately $130.9 million of cash and cash equivalents as of March 31, 2025.

Our current capital resources consist of approximately $158.5 million of cash and cash equivalents as of June 30, 2025.

Long Term Liquidity and Capital Resources of NextDecade Corporation

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As a result, our business success will depend, to a significant extent, upon our ability to obtain financing required to fund future phases of development and construction at the Rio Grande LNG Facility and any CCS projects, to bring them into operation on a commercially viable basis and to finance any required increases in staffing, operating and expansion costs during that process.

There can be no assurance that we will succeed in securing additional debt and/or equity financing in the future to fund future phases of development and construction at the Rio Grande LNG Facility or complete any CCS projects or, if successful, that the capital we raise will not be expensive or dilutive to stockholders.

dilutive to stockholders.

Additionally, if these types of financing are not available, we will be required to seek alternative sources of financing, which may not be available on terms acceptable to us, if at all.

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The following table summarizes the sources and uses of our cash for the periods presented (in thousands):

Three Months Ended

Six Months Ended June 30,

Operating cash flows $ (72,722) (22,838)

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Cash, cash equivalents and restricted cash – end of period $ 457,039 $ 203,079

Cash used in operating activities for the three months ended March 31, 2025 increased by approximately $40.0 million compared to the same period in 2024 primarily due to the timing of required interest payments.

Cash provided by financing activities for the three months ended March 31, 2025 increased by approximately $75.2 million compared to the same period in 2024 primarily due to debt repayments of $176.0 million associated with refinancing activity during the prior period partially offset by a decrease in debt proceeds of approximately $123.9 million.

Cash used in operating activities for the six months ended June 30, 2025 increased by approximately $49.9 million compared to the same period in 2024 primarily due to higher pre-operational expenditures and working capital investments to support the commencement of operations at the Rio Grande LNG Facility.

Cash used in investing activities for the six months ended June 30, 2025 increased by approximately $157.0 million compared to the same period in 2024 primarily due to increased expenditures associated with the Rio Grande LNG Facility.

Cash provided by financing activities for the six months ended June 30, 2025 increased by approximately $362.6 million compared to the same period in 2024.

This was driven by an increase of approximately $79.3 million uptick in equity commitment receipts and the absence of approximately $1.3 billion of debt repayments in the current period.

These increases were partially offset by a $1.0 billion reduction in debt proceeds.

Results of Operations

The following table summarizes costs, expenses and other income for the periods indicated (in thousands):

Three Months Ended

2025 2024 Change

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenues $ — $ — $ — $ —

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Other (expense) income:

Derivative (loss) gain (168,700) 258,872 (427,572)

Interest expense, net of capitalized interest (27,205) (25,479) (1,726)

Derivative gain (loss) 25,157 109,067 (143,543) 367,939

Interest expense, net (28,833) (26,030) (56,038) (51,509)

Loss on debt extinguishment (9,160) (40,133) (9,160) (47,573)

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net (loss) income attributable to non-controlling interest (9,765) 34,880 (166,188) 193,309

Net (loss) income attributable to common stockholders $ (88,805) $ 28,346 $ (117,151)

Net loss attributable to common stockholders was approximately $88.8 million, for the three months ended March 31, 2025 compared to net income of $28.3 million during the same period in 2024.

The $117.2 million decrease was primarily a result of the following:

• Decrease of approximately $427.6 million in unrealized derivative losses primarily due to a decrease in forward SOFR rates

• Due to the changes in derivatives losses, net income attributable to non-controlling interest during the three months ended March 31, 2025 decreased approximately $314.9 million as those activities are a component of Intermediate Holdings net income and loss.

Net loss attributable to common stockholders $ (60,867) $ (32,576) $ (149,672) $ (4,230)

Net loss attributable to common stockholders was approximately $60.9 million, for the three months ended June 30, 2025 compared to net loss of $32.6 million during the same period in 2024.

The $28.3 million increase was primarily a result of the following:

• General and administrative expenses increased by approximately $18.1 million, principally reflecting incremental headcount additions to support the commencement of operations at the Rio Grande LNG Facility.

• Unrealized derivative gains decreased by approximately $83.9 million, primarily reflecting lower forward SOFR rates.

• Loss on debt extinguishment decreased approximately $31.0 million due to the lack of debt repayments during the current period.

• Due to the above changes, net income attributable to non-controlling interest during the three months ended June 30, 2025 decreased approximately $44.6 million as those activities are a component of Intermediate Holdings net income and loss.

Net loss attributable to common stockholders was approximately $149.7 million, for the six months ended June 30, 2025 compared to net loss of $4.2 million during the same period in 2024.

The $145.4 million increase was primarily a result of the following:

• General and administrative expenses increased by approximately $30.6 million, principally reflecting incremental headcount additions to support the commencement of operations at the Rio Grande LNG Facility.

• Unrealized derivative gains decreased by approximately $511.5 million, primarily reflecting lower forward SOFR rates.

• Loss on debt extinguishment decreased approximately $38.4 million due to the lack of debt repayments during the current period.

• Due to the above changes, net income attributable to non-controlling interest during the six months ended June 30, 2025 decreased approximately $359.5 million as those activities are a component of Intermediate Holdings net income and loss.

Summary of Critical Accounting Estimates

There were no changes made by management to the critical accounting policies in the three months ended March 31, 2025.

There were no changes made by management to the critical accounting policies in the three months ended June 30, 2025.

Please refer to the Summary of Critical Accounting Estimates section within MD&A and Note 2 to the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our critical accounting estimates and accounting policies.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis