US LNG developer NextDecade (NEXT) said its first Rio Grande LNG train remains on track to begin producing liquefied natural gas in 2026, with additional trains expected to come online faster than current market forecasts, TPH Energy strategists said in a note Thursday.
NextDecade executives said Phase One of the Rio Grande LNG project is running ahead of schedule, with Train 1 expected to produce its first LNG about this time next year. Trains 2 and 3 are expected to follow within six to eight months of the first unit.
Zack Van Everen, analyst at TPH Energy, said the timeline appears more aggressive than TPH's current macro forecast, which assumes Train 2 starts in Q3 2028 and Train 3 in Q1 2029.
NextDecade is targeting first gas at Train 1 in 2026 and expects first LNG exports around the same time next year. The company's management said Train 1 would take the longest to ramp up because it is the facility's first liquefaction unit.
The energy firm said it was comfortable with the feedgas supply given Rio Grande LNG's proximity to the Agua Dulce hub in Texas and its access to gas from the Permian Basin, the Eagle Ford, and the Katy markets, if required.
NextDecade plans to continue securing gas supply agreements, including some longer-term contracts, as additional trains are developed.
TPH Energy said producers have not sought a premium for supplying gas to the project, allowing purchases at Agua Dulce pricing.
For future expansion phases, NextDecade said estimated liquefaction costs for Trains 4 and 5 averaged about $2.50 per million British thermal units, with Train 5 expected to cost slightly more than Train 4.
Elsewhere, midstream operator Western Midstream Partners (WES) discussed shut-in gas volumes in the Permian Basin, commodity exposure, and opportunities tied to power demand and data center growth.
Western Midstream said it has seen between zero and 300 million cubic feet per day of gas shut in on any given day in the Permian, though increased in-transit volumes on its system have offset some of those declines.
The company pointed to growing activity in the Powder River Basin, where producers have been more responsive to higher oil prices, potentially supporting growth into 2027 if drilling activity continues.
Van Everen said Western Midstream executives said rising power demand from data centers was becoming a growing focus, as the energy firm has access to land, water, and natural gas infrastructure that could support future developments.
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