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Item 2. Management’s Discussion and Analysis

2025-05-06 compared with 2024-11-07 · 99 added, 196 removed, 113 unchanged (72% of the section changed)

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Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements.

The words “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “plan,” “intend,” “target,” “believe,” “may,” “might,” “will,” “would,” “could,” “should,” “can have,” “likely,” “continue,” “design” and other words and terms of similar expressions, are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs.

This Quarterly Report on Form 10-Q contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The words “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “plan,” “intend,” “target,” “believe,” “seek,” “may,” “might,” “will,” “would,” “could,” “should,” “can have,” “likely,” “continue,” “design,” “assume,” “budget,” “forecast,” “target,” and other words and terms of similar expressions, are intended to identify forward-looking statements.

We have based these forward-looking statements on assumptions and analysis made by us in light of our current expectations, perceptions about historical trends, current conditions and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ from those expressed in our forward-looking statements.

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• the timing and cost of the development, construction and operation of the first three liquefaction trains and related common facilities (“Phase 1”) of the multi-plant integrated natural gas and liquefaction and LNG export terminal facility to be located at the Port of Brownsville in southern Texas (the “Rio Grande LNG Facility”);

• the availability and frequency of cash distributions available to us from our joint venture owning Phase 1 of the Rio Grande LNG Facility;

• the availability and frequency of cash distributions available to us from our joint venture which owns Phase 1 of the Rio Grande LNG Facility;

• the timing and cost of the development of subsequent liquefaction trains at the Rio Grande LNG Facility;

• the ability to generate sufficient cash flow to satisfy Rio Grande's significant debt service obligations or to refinance such obligations ahead of their maturity;

• restrictions imposed by Rio Grande's debt agreements that limit flexibility in operating its business;

• restrictions imposed by NextDecade's or Rio Grande's debt agreements that limit flexibility in operating its business;

• increases in interest rates increasing the cost of servicing Rio Grande's indebtedness;

• our reliance on third-party contractors to successfully complete the Rio Grande LNG Facility and any CCS projects we develop;

• our reliance on third parties to successfully complete the Rio Grande LNG Facility, any CCS projects we develop, and related pipelines and other infrastructure;

• our ability to develop and implement CCS projects;

• our ability to secure additional debt and equity financing in the future, including any refinancing of outstanding indebtedness, on commercially acceptable terms and to continue as a going concern;

• our ability to secure additional debt and equity financing in the future, including any refinancing of outstanding indebtedness, on commercially acceptable terms;

• the accuracy of estimated costs for the Rio Grande LNG Facility and CCS projects;

• our ability to achieve operational characteristics of the Rio Grande LNG Facility and CCS projects, when completed, including amounts of liquefaction capacities and amount of CO 2 captured and stored, and any differences in such operational characteristics from our expectations;

• the development risks, operational hazards and regulatory approvals applicable to our LNG and carbon capture and storage development, construction and operation activities and those of our third-party contractors and counterparties;

• the ability to obtain or maintain governmental approvals to construct or operate the Rio Grande LNG Facility and CCS projects, including in relation to the August 2024 decision by the D.C.

Circuit Court of Appeals;

• the development risks, operational hazards and regulatory approvals applicable to our LNG and CCS project development, construction and operation activities and those of our third-party contractors and counterparties;

• the ability to obtain or maintain governmental approvals to construct or operate the Rio Grande LNG Facility and CCS projects;

• technological innovation which may lessen our anticipated competitive advantage or demand for our offerings;

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• adverse changes to existing or proposed carbon tax incentive regimes;

• global pandemics, including the 2019 novel coronavirus (“COVID-19”) pandemic, the Russia-Ukraine conflict, the Israel-Hamas conflict, other sources of volatility in the energy markets and their impact on our business and operating results, including any disruptions in our operations or development of the Rio Grande LNG Facility and the health and safety of our employees, and on our customers, the global economy and the demand for LNG or carbon capture;

• risks related to doing business in and having counterparties in foreign countries;

• global pandemics, the Russia-Ukraine conflict, conflict in the Middle East, other sources of volatility in the energy markets and their impact on our business and operating results, including any disruptions in our operations or development of the Rio Grande LNG Facility and the health and safety of our employees, and on our customers, the global economy and the demand for LNG or carbon capture;

• risks related to doing business in and having counterparties in foreign countries, including as a result of tariffs;

• our ability to maintain the listing of our securities on the Nasdaq Capital Market or another securities exchange or quotation medium;

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NextDecade Corporation, a Delaware corporation, is a Houston-based energy company primarily engaged in construction and development activities related to the liquefaction of natural gas and sale of LNG and the capture and storage of CO 2 emissions.

We are constructing a natural gas liquefaction and export facility located in the Rio Grande Valley in Brownsville, Texas (the “Rio Grande LNG Facility”), which currently has three liquefaction trains and related infrastructure under construction.

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 five liquefaction trains and supporting infrastructure with LNG exports totaling 27 million tonnes per annum (“MTPA”).

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

Liquefaction trains 1 through 3 and related infrastructure are currently under construction and liquefaction trains 4 and 5 at the Rio Grande LNG Facility are currently in development.

We are also developing and seeking to commercialize potential carbon capture and storage (“CCS”) projects.

We are constructing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel.

The site is located on 984 acres of land which has been leased long-term and includes 15 thousand 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 US Gulf Coast.

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.

In July 2023, our partially owned subsidiary Rio Grande LNG, LLC (“Rio Grande”) commenced construction on the first three liquefaction trains and related infrastructure (“Phase 1”) of the Rio Grande LNG Facility following a positive final investment decision (“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 Energy Inc.

(“Bechtel”) under fully wrapped, lump-sum turnkey engineering, procurement, and construction (“EPC”) contracts, and will utilize APCI 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.

Rio Grande has entered into long-term LNG Sale and Purchase Agreements (“SPAs”) for over 90% of the expected Phase 1 nameplate LNG production capacity, pursuant to which Rio Grande customers are generally required to pay a fixed fee with respect to the contracted volumes, irrespective of whether they cancel or suspend deliveries of LNG cargoes.

These SPAs create a stable foundation of predictable, long-term cash flows to Rio Grande.

We believe our SPAs are attractive to our customers for several reasons, including long-term reliable supply, volumes to support growing demand for LNG and to replace customers’ contracts with legacy LNG suppliers, diversification of supply portfolios in terms of geography, price indexation, delivery points, and/or tenor, flexibility of volumes with no destination restrictions, and the ability of our LNG to help our customers achieve their ESG goals.

Rio Grande expects to sell any commissioning LNG volumes and operational LNG volumes in excess of SPA volumes into the LNG market through spot, short-term, and medium-term agreements.

Rio Grande has entered into certain time charter agreements and expects to enter into additional time charter agreements with vessel owners to provide shipping capacity for LNG sales related to its existing DES SPA, commissioning volumes, and expected portfolio volumes.

We will provide a number of services in support of producing and selling LNG from the Rio Grande LNG Facility pursuant to its SPAs, including natural gas feedstock procurement and transportation, liquefaction, and delivery of LNG to customers either at the loading dock of the Rio Grande LNG Facility or at the customer’s global delivery points via chartered vessels.

We are constructing and developing a natural gas liquefaction and export facility located in the Rio Grande Valley near Brownsville, Texas (the “Rio Grande LNG Facility”).

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.

We are focused on constructing and operating the Rio Grande LNG Facility safely, efficiently, on schedule, and on budget.

We seek to deliver reliable, economically attractive, and sustainable energy solutions through the development and operation of liquefaction and CCS infrastructure.

We seek to deliver secure, economically attractive, and sustainable energy solutions through the development and operation of liquefaction and CCS infrastructure.

Unless the context requires otherwise, references to “NextDecade,” “the Company,” “we,” “us,” and “our” refer to NextDecade Corporation and its consolidated subsidiaries, and references to “Rio Grande” refer to Rio Grande LNG, LLC and its subsidiaries.

Significant Recent Developments

Significant developments since January 1, 2024 and through the filing date of this 10-Q include the following:

• Under the EPC contracts with 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 September 2024:

Significant developments since January 1, 2025 include the following:

• Under the engineering, procurement, and construction (“EPC”) contracts with Bechtel Energy, Inc.

(“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:

• The overall project completion percentage for Trains 1 and 2 and the common facilities of the Rio Grande LNG Facility was 42.8%, which is in line with the schedule under the EPC contract.

Within this project completion percentage, engineering was 87.9% complete, procurement was 76.3% complete, and construction was 14.1% complete.

• The overall project completion percentage for Train 3 of the Rio Grande LNG Facility was 9.8%, based on preliminary schedules, which is also in line with the schedule under the EPC contract.

project completion percentage, engineering was 17.0% complete, procurement was 21.9% complete, and construction was 0.1% complete.

• The overall project completion percentage for Train 3 of the Rio Grande LNG Facility was 17.8%, which is also in line with the schedule under the EPC contract.

Within this project completion percentage, engineering was 41.9% complete, procurement was 37.2% complete, and construction was 0.8% complete.

• In February 2025, the Company provided additional information regarding its development of additional liquefaction capacity at the Rio Grande LNG Facility beyond Trains 1 through 5.

Trains 6 through 8 are wholly owned by NextDecade and are cumulatively expected to increase the Company's total liquefaction capacity by approximately 18 MTPA once constructed and placed into operation.

◦ Train 6, with expected LNG production capacity of approximately 6 MTPA, is being developed inside the existing levee at the site and adjacent to Trains 1 through 5.

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.

Strategic and Commercial

• In May 2024, the Company entered into a 20-year LNG SPA with ADNOC, pursuant to which ADNOC will purchase 1.9 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.

• In June 2024, the Company entered into a non-binding Heads of Agreement (HoA) with Aramco for a 20-year LNG SPA for offtake from Train 4 at the Rio Grande LNG Facility.

Under the terms of the HoA, Aramco expects to purchase 1.2 MTPA of LNG for 20 years, on an FOB basis at a price indexed to Henry Hub.

Aramco and the Company are in the process of negotiating a binding LNG SPA, and once executed, the SPA will be subject to a positive FID on Train 4.

• In July 2024, the Company appointed Tarik Skeik as Chief Operating Officer.

Skeik has over 20 years of experience delivering complex global mega projects in LNG, oil, and petrochemicals across North America, the Middle East, and Asia.

He led the completion and start-up of six greenfield assets, and his experience includes the planning and execution through initial operation of projects including the Huizhou Chemicals Complex in China, Gulf Coast Growth Ventures in the US, Banyu Urip in Indonesia, Kearl Expansion in Canada, and QatarGas 2 in Qatar.

• In August 2024, the Company finalized an EPC contract with Bechtel for Train 4 and related infrastructure for a cost of approximately $4.3 billion.

Price validity under the EPC contract for Train 4 and related infrastructure extends through December 31, 2024.

• In January 2024, the Company’s wholly-owned subsidiary NextDecade LLC entered into a credit agreement that provides for a $50 million senior secured revolving credit facility with additional capacity of $12.5 million to cover interest.

Borrowings under the revolving credit facility may be used for general corporate purposes, including development costs related to Train 4 at the Rio Grande LNG Facility.

Borrowings bear interest at SOFR or the base rate plus an applicable margin as defined in the credit agreement.

The revolving credit facility and interest term loan mature at the earlier of two years from the closing date of 10 business days after a positive FID on Train 4.

• In February 2024, Rio Grande issued and sold $190 million of senior secured notes in a private placement transaction to finance a portion of Phase 1.

The Senior secured notes were issued on February 9, 2024 and resulted in a reduction in the commitments outstanding under Rio Grande's existing bank credit facilities for Phase 1.

These senior secured notes will be amortized over a period of approximately 18 years beginning in mid-2029, with a final maturity in June 2047.

The senior secured notes bear interest at a fixed rate of 6.85% and rank pari passu to Rio Grande's existing senior secured financings.

• In June 2024, Rio Grande issued $1.115 billion of senior secured notes in a private placement, and net proceeds were utilized to reduce outstanding borrowings and commitments under existing Rio Grande bank credit facilities for Phase 1.

These senior secured notes will be amortized over a period of 18 years beginning in September 2029, with a final maturity in September 2047.

The senior secured notes bear interest at a fixed rate of 6.58% and rank pari passu to Rio Grande's existing senior secured financings.

Including this transaction, the Company has refinanced a total of over $1.85 billion of the original $11.1 billion Rio Grande term loan facilities since a positive FID was reached on Phase 1 at the Rio Grande LNG Facility in July 2023.

• In August 2024, the U.S.

• 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.

• In April 2025, the Company announced that TotalEnergies exercised its LNG purchase option with respect to Train 4 and the Company entered into a 20-year LNG SPA with TotalEnergies, pursuant to which TotalEnergies will purchase 1.5 MTPA of LNG from Train 4 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 4.

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

• 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 March 2025, the U.S.

Court of Appeals for the D.C.

Circuit (the “Court”) issued a decision vacating the FERC reauthorization of the Rio Grande LNG Facility on the grounds that FERC should have issued a supplemental Environmental Impact Statement (“EIS”) during its reauthorization process.

On October 21, 2024, the Company filed a petition for rehearing and rehearing en banc with the Court.

• The Court's decision will not be effective until the Court has issued its mandate, which is not expected to occur until after the appeals process has been completed.

• At this time, construction continues on Phase 1 at the Rio Grande LNG Facility.

• The Company expects to take all available legal and regulatory actions, including but not limited to, appellate actions and other strategies, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals will be maintained to enable the FID of Trains 4 and 5 at the Rio Grande LNG Facility.

Circuit (the “D.C.

Circuit Court”) issued a revision to its August 2024 decision regarding the Company's FERC order, resulting in a remand without vacatur of the FERC order for the first five liquefaction trains at the Rio Grande LNG Facility.

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.

Rio Grande LNG Facility Activity

Liquefaction Facilities Overview

We are constructing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel.

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

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 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 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.

Phase 1 includes three liquefaction trains with a total expected nameplate capacity of approximately 17.6 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 September 2024, progress on Trains 1 through 3 is in line with the schedule under the EPC Contracts.

Train 1 foundation pours continued during the third quarter with compressor foundations, and the first concrete pour was completed for Train 2.

Pipe work continued to progress on Train 1.

Deep soil mixing for Train 2 continued, and rebar work was completed for the Train 2 main pipe rack.

Work to relocate equipment and begin deep soil mixing is underway for Train 3, and tank wall construction began on Tank 1.

Bechtel has continued to make meaningful progress on procurement for Phase 1, with a focus on completing purchase orders for critical and high-value items early in the construction process.

As of September 2024, Bechtel has issued approximately 96% of the total purchase orders for Trains 1 and 2 and approximately 98% of the total purchase orders for Train 3.

LNG Sale and Purchase Agreements

For Phase 1 of the Rio Grande LNG Facility, Rio Grande has entered into long-term LNG SPAs with nine creditworthy counterparties for aggregate volumes of approximately 16.2 MTPA of LNG, which is over 90% of the expected Phase 1 nameplate LNG production capacity.

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.

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.

Phase 1 LNG Sale and Purchase Agreements

For Phase 1 of the Rio Grande LNG Facility, Rio Grande has entered into long-term LNG SPAs with nine creditworthy counterparties for aggregate volumes of approximately 16.2 MTPA of LNG.

The SPAs have a weighted average term of 19.2 years.

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however, the commencement of the term of each SPA is tied to a specified train.

Rio Grande’s portfolio of LNG SPAs for Phase 1 of the Rio Grande LNG Facility is as follows:

Customer Volume (MTPA) Tenor (years) Delivery Model (1)

TotalEnergies Gas & Power North America, Inc.

Shell NA LNG LLC (“Shell”) 2.0 20 FOB

ENN LNG Singapore Pte Ltd.

China Gas Hongda Energy Trading Co., LTD 1.0 20 FOB

Guangdong Energy Group 1.0 20 DES

Exxon Mobil LNG Asia Pacific 1.0 20 FOB

Galp Trading S.A.

Itochu 1.0 15 FOB

Total 16.15 19.2 years

weighted average

(1) FOB - free on board;

DES - delivered ex-ship

Each of these SPAs is currently effective, and deliveries of LNG under these SPAs will commence on the respective Date of First Commercial Delivery (“DFCD”), which is primarily tied to the substantial completion or guaranteed substantial completion dates of specific trains as defined in each SPA.

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Rio Grande expects to sell any commissioning LNG volumes and operational LNG volumes in excess of SPA volumes into the LNG market through spot, short-term, and medium-term agreements.

Rio Grande has entered into certain time charter agreements and expects to enter into additional time charter agreements with vessel owners to provide shipping capacity for LNG sales related to its existing Phase 1 delivered ex-ship SPA, commissioning volumes, and expected portfolio volumes.

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 Train 4 at the Rio Grande LNG Facility, under which Bechtel has generally guaranteed cost, performance, and schedule.

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.

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Natural Gas Transportation and Supply

For Phase 1 of the Rio Grande LNG Facility, we have entered into a firm transportation agreement for capacity on the Rio Bravo Pipeline to transport natural gas feedstock to the Rio Grande LNG Facility.

The Rio Bravo Pipeline will be developed by Whistler LLC, a joint venture between WhiteWater, I Squared, MPLX LP, and Enbridge, and will be constructed and operated by WhiteWater.

The Rio Bravo Pipeline will provide access to purchase natural gas supplies in the Agua Dulce area and will connect to multiple regional intra- and interstate pipelines, giving us access to prolific gas production from the Permian Basin and Eagle Ford Shale and providing significant flexibility to obtain competitively priced natural gas feedstock.

The Rio Bravo Pipeline is under development and is expected to be constructed and completed prior to the start of commissioning of Train 1 at the Rio Grande LNG Facility.

We have also entered into an agreement for capacity on an interruptible basis with Enbridge’s Valley Crossing Pipeline to provide redundant natural gas transportation capacity to the Rio Grande LNG Facility for commissioning and operations.

We have entered into and may enter into additional transportation capacity agreements over time as part of our overall gas sourcing strategy to facilitate efficient and economic delivery of natural gas to the Rio Grande LNG Facility.

We have proposed and are in the process of executing on a substantial and diversified natural gas feedstock sourcing strategy to spread risk exposure across multiple contracts, counterparties, and pricing hubs.

We expect to enter

into gas supply arrangements with a wide range of suppliers, and we also expect to leverage trading platforms and exchanges to lock in natural gas supply prices and/or hedge risk.

Certain of our LNG offtake counterparties have the option to sell to Rio Grande some or all of the natural gas required to produce their respective contracted LNG volumes pursuant to structured options which define how much volume can be supplied and how much notice must be provided to switch to and from self-sourcing.

We are in the process of executing a substantial and diversified natural gas feedstock sourcing and transportation strategy to spread risk exposure across multiple contracts, counterparties, and pricing hubs.

We expect to enter into gas supply arrangements with a wide range of suppliers, and we also expect to leverage trading platforms and exchanges to lock in natural gas supply prices and/or hedge risk.

We have entered into agreements for transportation of natural gas to the Rio Grande LNG Facility on both a firm and interruptible basis to support commissioning and operations and provide the ability to purchase natural gas supplies at the Agua Dulce Hub, giving us access to prolific gas production from the Permian Basin and Eagle Ford Shale and providing significant flexibility to obtain competitively priced natural gas feedstock.

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 of Train 4 and Train 5 at the Rio Grande LNG Facility

We expect to make a positive final investment decision and commence construction of Train 4 and related infrastructure, and subsequently Train 5 and related infrastructure, at the Rio Grande LNG Facility, subject to, among other things, maintaining requisite governmental approvals, finalizing and entering into EPC contracts, entering into appropriate commercial arrangements, and obtaining adequate financing to construct each train and related infrastructure.

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.

Price validity under the EPC contract for Train 4 and related infrastructure extends through December 31, 2024.

The Company continues to advance commercial discussions with multiple potential counterparties and expects to finalize commercial arrangements for Train 4 in the coming months to support a positive FID on Train 4.

The Company entered into an LNG SPA with ADNOC for the sale of 1.9 MTPA of LNG from Train 4, as well as a non-binding HoA with Aramco for the sale of 1.2 MTPA of LNG from Train 4.

The Company is working with Aramco to finalize a binding SPA.

Additionally, an affiliate of TotalEnergies SE (“TotalEnergies”) has an LNG purchase option of 1.5 MTPA for Train 4, and the Company expects TotalEnergies to exercise the option.

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.

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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 take a final investment decision on Train 4 after commercial and financing arrangements are finalized.

The Company expects to progress the development of Train 5 after a positive FID on Train 4.

TotalEnergies also 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 materially equivalent to their options to participate in Train 4 equity.

On April 21, 2023, FERC issued the order on remand (the “Remand Order”) reaffirming the order issued by FERC on November 22, 2019, authorizing the siting, construction and operation of the Rio Grande LNG Facility (the “Order”).

The Remand Order reaffirmed that the Rio Grande LNG Facility is not inconsistent with the public interest under the Natural Gas Act Section 3.

The Remand Order was issued as a result of the decision of the U.S.

Court of Appeals for the District of Columbia (the “D.C.

Circuit”) dated August 3, 2021, which denied all petitions filed by parties who filed requests for re-hearing of the Order, except for two technical issues dealing with environmental justice and GHG emissions, which were remanded to FERC for further consideration.

Parties sought rehearing of the Remand Order, which FERC denied by operation of law on June 22, 2023, and subsequently issued a substantive order on the merits upholding the conclusions in the Remand Order, and its reaffirmation of the FERC Order.

On August 17, 2023, parties petitioned the D.C.

Circuit for review of the Remand Order.

On November 24, 2023, a motion was filed with FERC to stay construction of the Rio Grande LNG Facility, which FERC denied on January 24, 2024.

On February 2, 2024, parties filed a motion with the D.C.

Circuit to stay construction of the Rio Grande LNG Facility.

On March 1, 2024 the motion to stay was denied by the D.C.

Oral arguments in the review of the Remand Order were held on May 17, 2024.

On August 6, 2024, the D.C.

Circuit issued a decision vacating FERC's reauthorization of the Rio Grande LNG Facility on the grounds that FERC should have issued a supplemental EIS during its remand process.

On October 21, 2024, the Company filed a petition for

rehearing and rehearing en banc with the D.C.

Circuit's decision will not be effective until the Court has issued its mandate, which is not expected to occur until the appeals process has been completed.

We expect to take all available legal and regulatory actions, including but not limited to, appellate actions and other strategies, to ensure that construction on Phase 1 will continue and that necessary regulatory approvals are maintained to enable the FID of Trains 4 and 5 at the Rio Grande LNG Facility.

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.

Development of Additional Liquefaction Capacity

The Company is developing and beginning the permitting process for additional liquefaction capacity at the Rio Grande LNG Facility site beyond Trains 1 through 5.

Train 6 is being developed inside the existing levee at the Rio Grande LNG Facility site and adjacent to Trains 1 through 5.

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.

Governmental Permits, Approvals and Authorizations

We have obtained all major permits required to build and export LNG from the first five liquefaction trains and related infrastructure at the Rio Grande Facility, including FERC approval and DOE FTA and non-FTA authorizations for the construction of up to five liquefaction trains and LNG exports totaling up to 27 MTPA.

In March 2025, the D.C.

Circuit Court issued a revision to its August 2024 decision regarding our FERC order, resulting in a remand without vacatur of the FERC order for the first five liquefaction trains at the Rio Grande LNG Facility.

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.

Corporate and Other Activities

We are required to maintain corporate and general and administrative functions to serve our business activities described above.

We are also in various stages of developing other projects, such as Train 4 and Train 5 at the Rio Grande LNG Facility, additional liquefaction expansions at the Rio Grande LNG Facility and potential CCS projects.

Financing Activity

Corporate Credit Facility

In January 2024, our wholly-owned subsidiary NextDecade LLC entered into a credit agreement that provides for a $50 million senior secured revolving credit facility with additional capacity of $12.5 million to cover interest.

Borrowings under the revolving credit facility may be used for general corporate purposes, including development costs related to Train 4 at the Rio Grande LNG Facility.

Borrowings bear interest at SOFR or the base rate plus an applicable margin as defined in the credit agreement.

The revolving credit facility and interest term loan mature at the earlier of two years from the closing date or 10 business days after a positive FID on Train 4.

Rio Grande Senior Secured Notes

In February 2024, Rio Grande issued and sold $190 million of senior secured notes to finance a portion of Phase 1.

The senior secured notes were issued on February 9, 2024 and resulted in a reduction in the commitments outstanding under Rio Grande's existing bank credit facilities for Phase 1.

These senior secured notes will be amortized over a period of approximately 18 years beginning in mid-2029, with a final maturity in June 2047.

The senior secured notes bear interest at a fixed rate of 6.85% and rank pari passu to Rio Grande's existing senior secured financings.

In June 2024, Rio Grande issued $1.115 billion of senior secured notes in a private placement, and proceeds were utilized to reduce outstanding borrowings and commitments under Rio Grande's existing bank credit facilities for Phase 1.

These senior secured notes will be amortized over a period of 18 years beginning in September 2029, with a final maturity in September 2047.

The senior secured notes bear interest at a fixed rate of 6.58% and rank pari passu to Rio Grande's existing senior secured financings.

We are required to maintain corporate and general and administrative functions to serve our business activities described above, including construction of Phase 1 at the Rio Grande LNG Facility, the development of Trains 4 through 8, and the development of a potential CCS project at the Rio Grande LNG Facility.

Liquidity and Capital Resources

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Prior to the FID on Phase 1 of the Rio Grande LNG Facility, our primary cash needs historically were funding development activities in support of the Rio Grande LNG Facility and our CCS projects, which included payments of initial direct costs of the Rio Grande site lease and expenses in support of engineering and design activities, regulatory approvals and compliance, commercial and marketing activities and corporate overhead.

We spent approximately $97.7 million on such development activities year-to-date through FID on July 12, 2023, which we funded through our cash on hand and proceeds from the issuances of equity and equity-based securities.

Following the FID on Phase 1 of the Rio

Grande LNG Facility, costs associated with the Phase 1 EPC agreements, Rio Grande site lease, and other Phase 1 related costs are being funded by debt and equity proceeds received by Rio Grande.

Because our businesses and assets are under construction or in development, we have not historically generated significant cash flow from operations, nor do we expect to do so until liquefaction trains at the Rio Grande LNG Facility begin operating or until we install CCS systems at third-party industrial facilities.

Following the FID on Phase 1 of the Rio Grande LNG Facility, costs associated with the Phase 1 EPC agreements, Rio Grande site lease, and other Phase 1 related costs are being funded by debt and equity proceeds received by Rio Grande.

We intend to fund development activities for the foreseeable future with cash and cash equivalents on hand and through the sale of additional equity, equity-based or debt securities in us or in our subsidiaries.

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 consolidated financial statements as of and for the three and nine months ended September 30, 2024 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Based on our balance of cash and cash equivalents of $38.2 million at September 30, 2024, there is substantial doubt about our ability to continue as a going concern within one year after the date that our consolidated financial statements were issued.

Our ability to continue as a going concern will depend on managing certain operating and overhead costs and our ability to raise capital through equity, equity-based or debt financings.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, which could have a material adverse effect on our financial condition.

Our capital raising activities since January 1, 2024 have included the following:

In January 2024, NextDecade LLC entered into a Credit and Guaranty Agreement by and among NextDecade LLC, as borrower, Rio Grande LNG Super Holdings, LLC and Rio Grande LNG Intermediate Super Holdings, LLC, as subsidiary guarantors, MUFG Bank, Ltd., as the administrative agent (the “Administrative Agent”), Wilmington Trust, National Association, as the collateral agent (the “Collateral Agent”), MUFG Bank, Ltd., as coordinating lead arranger and bookrunner and the financial institutions party thereto as lenders.

The Credit and Guarantee Agreement provides for the following facilities:

• a revolving loan facility (the “Revolving Loans”) in an amount up to $50.0 million available to NextDecade LLC to be used for (a) general corporate purposes and working capital requirements of NextDecade LLC and its subsidiaries, including development costs related to the fourth liquefaction train and related common facilities at the Rio Grande LNG Facility, and (b) certain permitted payments on behalf of the Company and its subsidiaries;

• an interest loan facility (the “Interest Loans” and together with the Revolving Loans, the “Loans”) in an amount up to $12.5 million available to NextDecade LLC to pay interest obligations, fees, and expenses due and payable under the Credit Agreement and the other finance documents.

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

Long Term Liquidity and Capital Resources of NextDecade Corporation

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

Nine Months Ended

September 30,

Three Months Ended

Operating cash flows $ (68,826) (28,825)

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Cash, cash equivalents and restricted cash – end of period $ 386,147 $ 251,398

Operating Cash Flows

Operating cash outflows during the nine months ended September 30, 2024, amounted to $86.7 million, compared to $52.6 million for the same period in 2023.

The increase in 2024 was primarily due to an increase in employee costs and professional fees paid to consultants as we construct Phase 1 of the Rio Grande LNG Facility and continue to develop subsequent phases.

These increases were partially offset by cash received in the settlement of derivatives.

Investing Cash Flows

Investing cash outflows for the nine months ended September 30, 2024, amounted to $1,879.6 million, compared to $1,010.4 million for the same period in 2023.

The increase in 2024 was primarily driven by more extensive construction activity, as construction of Phase 1 of the Rio Grande LNG Facility did not begin until July 2023.

Financing Cash Flows

Financing cash inflows for the nine months ended September 30, 2024, totaled $1,937.6 million, compared to $1,446.1 million for the same period in 2023.

The increase in 2024 was primarily driven by a $1,599.9 million increase in debt and equity commitment proceeds and a $438.3 million decrease in debt issuance costs paid compared to the prior year.

This was partly offset by $1,282.0 million in debt repayments and the absence of common stock sales during the current period compared to the prior year.

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.

Results of Operations

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

For the Three Months Ended September 30, 2024 For the Nine Months Ended September 30, 2024

2024 2023 Change 2024 2023 Change

Three Months Ended

2025 2024 Change

Revenues $ — $ — $ —

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Development expense 307 2,509 (2,202)

Lease expense 2,559 2,582 (23) 8,181 3,245 4,936

Depreciation expense 613 42 571 1,317 117 1,200

Depreciation and amortization expense 3,149 3,103 46

Other 3,518 — 3,518

Total operating loss (51,916) (38,117) (13,799)

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net (loss) income attributable to non-controlling interest (156,423) 158,429 (314,852)

preferred stock dividends — 7,030 (7,030) — 20,484 (20,484)

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

Net loss attributable to common stockholders was $123.2 million, or $(0.47) per common share (basic and diluted) for the three months ended September 30, 2024 compared to a net income of $107.6 million, or $0.48 per common share (basic and diluted), for the three months ended September 30, 2023.

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:

• General and administrative expenses during the three months ended September 30, 2024 increased approximately $11.5 million compared to the same period in 2023 primarily due to an increase in professional fees and employee costs, partially offset by a decrease in share-based compensation expense.

• Derivative losses during the three months ended September 30, 2024 increased approximately $570.0 million compared to the same period in 2023 primarily due to a decrease in forward SOFR rates when compared to the prior period.

• Interest expense, net of capitalized interest during the three months ended September 30, 2024 decreased approximately $16.6 million compared to the same period in 2023 primarily due to an approximate $43.3 million increase in capitalized interest, partially offset by a $26.6 million increase in total interest costs.

• Due to the changes in derivatives losses and interest expense, net of capitalized interest described above, net income attributable to non-controlling interest during the three months ended September 30, 2024 decreased approximately $337.1 million as those activities are a component of Intermediate Holdings net income and loss.

Net loss attributable to common stockholders was $127.4 million, or $(0.49) per common share (basic and diluted) for the nine months ended September 30, 2024 compared to a net loss of $53.5 million, or $(0.31) per common share (basic and diluted), for the nine months ended September 30, 2023.

The $73.9 million increase was primarily a result of the following:

• General and administrative expenses during the nine months ended September 30, 2024 increased approximately $24.8 million compared to the same period in 2023 primarily due to an increase in professional fees and employee costs, partially offset by a decrease in share-based compensation expense.

• Derivative gains during the nine months ended September 30, 2024 decreased approximately $114.6 million compared to the same period in 2023 primarily due to a decrease in forward SOFR rates when compared to the prior period.

• Interest expense, net of capitalized interest during the nine months ended September 30, 2024 increased approximately $34.9 million compared to the same period in 2023 primarily due to an approximately $144.4 million increase in total interest costs partially offset by an increase of $109.1 million of capitalized interest.

• Loss on debt extinguishment of $47.6 million during the nine months ended September 30, 2024 due to $1,282.0 million in debt repayments compared to none in the prior year.

• Due to the changes in derivatives losses, interest expense, net of capitalized interest and loss on debt extinguishment described above, net income attributable to non-controlling interest during the nine months ended September 30, 2024 decreased approximately $143.8 million as those activities are a component of Intermediate Holdings net income and loss.

• 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.

Summary of Critical Accounting Estimates

The preparation of our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes.

There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

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