NextDecade, Baker Hughes Enter Framework Agreement for Rio Grande LNG Expansion Trains

Rhea-AI Summary

NextDecade (NASDAQ: NEXT) and Baker Hughes (NASDAQ: BKR) have entered into a framework agreement for the Rio Grande LNG Facility expansion. Baker Hughes will provide gas turbine and refrigerant compressor technology, along with maintenance services for Trains 4 through 8.

NextDecade is advancing the commercialization of Trains 4 and 5, with plans to make final investment decisions pending governmental approvals, EPC contracts, commercial arrangements, and adequate financing. The company is also initiating the permitting process for Trains 6 through 8, which are expected to increase total liquefaction capacity by approximately 18 million tonnes per annum.

Positive

• Strategic partnership with industry leader Baker Hughes for critical equipment and maintenance
• Progress on commercializing Trains 4 and 5
• Planned expansion with Trains 6-8 to add 18 million tonnes per annum capacity

Negative

• Final investment decisions for Trains 4-5 still pending multiple conditions
• Trains 6-8 still in early permitting phase with no timeline specified

Insights

Financial Analyst

NextDecade's framework agreement with Baker Hughes marks a significant advancement in the company's Rio Grande LNG expansion strategy. This deal secures critical gas turbine and refrigerant compressor technology along with maintenance services for Trains 4-8, positioning NEXT to substantially increase its LNG production capacity.

The announcement indicates NEXT is progressing on two parallel tracks: nearing final investment decisions for Trains 4-5 while simultaneously developing and permitting Trains 6-8, which would add 18 million tonnes per annum of liquefaction capacity. This phased expansion approach demonstrates methodical scaling of operations.

While this framework agreement doesn't guarantee immediate revenue impact, it represents a important operational foundation for NEXT's ambitious growth plans. The company must still clear several hurdles before finalizing investment decisions, including maintaining regulatory approvals, executing EPC contracts, securing commercial arrangements, and obtaining project financing.

From a competitive perspective, this partnership with an industry leader like Baker Hughes enhances NEXT's operational credibility and execution capability in the capital-intensive LNG sector. The agreement signals confidence in NEXT's expansion roadmap and suggests the company is positioning itself as a major player in global LNG export markets, particularly important as global demand for natural gas continues to grow.

Energy Infrastructure Specialist

This framework agreement between NextDecade and Baker Hughes represents a strategic piece in NEXT's larger LNG infrastructure puzzle. The selection of Baker Hughes' technology packages is particularly significant as these critical components directly impact facility reliability, operational efficiency, and ultimate production capacity.

The equipment packages mentioned – gas turbines and refrigerant compressors – constitute the heart of any LNG train, essentially determining both production capacity and energy efficiency. In LNG operations, even minor efficiency improvements can translate to significant operational cost savings over a facility's multi-decade lifespan.

NextDecade's phased approach to the Rio Grande facility expansion demonstrates prudent project management. By securing the technology framework for all five planned expansion trains (4-8) while actively progressing only Trains 4-5 toward FID, the company maintains technological consistency while managing capital deployment carefully.

The maintenance services component is equally important, as unplanned downtime in LNG facilities can cost millions in lost production. Baker Hughes' involvement provides operations assurance that would appeal to potential LNG offtakers and project financiers alike, potentially easing NextDecade's path to final investment decisions on these expansion trains.

This agreement suggests NEXT is methodically building out its infrastructure capabilities to establish itself as a major player in U.S. LNG exports, potentially capturing significant market share in the growing global demand for natural gas.

HOUSTON--(BUSINESS WIRE)-- NextDecade Corporation (NextDecade or the Company) (NASDAQ: NEXT) and Baker Hughes (NASDAQ: BKR) announced today that they have entered into a framework agreement whereby NextDecade plans to utilize Baker Hughes’ gas turbine and refrigerant compressor technology (Equipment Packages) and enter into contractual services agreements to perform maintenance work for these Equipment Packages for Trains 4 through 8 at the Rio Grande LNG Facility.

“Utilizing Baker Hughes’ industry-leading rotating equipment and their maintenance services is critical to ensuring the Rio Grande LNG Facility operates efficiently and reliably,” said Matt Schatzman, Chairman and CEO of NextDecade. “We look forward to continuing our collaboration with Baker Hughes as we progress our plans to make the Rio Grande LNG Facility one of the largest LNG production and export facilities in the world.”

“Baker Hughes is proud to continue our long-standing relationship with NextDecade, providing advanced gas technology solutions that enhance the efficiency and reliability of their LNG operations,” said Lorenzo Simonelli, Chairman and CEO of Baker Hughes. “This agreement is a further example of our commitment to delivering innovative solutions in support of increasing energy demand.”

NextDecade is making excellent progress on commercializing Rio Grande LNG Trains 4 and 5. The Company expects to make positive final investment decisions and commence construction on Trains 4 and 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.

NextDecade is developing and beginning the permitting process for Trains 6 through 8, which are wholly owned by NextDecade and are cumulatively expected to increase the Company's total liquefaction capacity by approximately 18 million tonnes per annum once constructed and placed into operation.

Baker Hughes expects orders, in relation to this agreement, as NextDecade’s project progresses.

About NextDecade Corporation

NextDecade is committed to providing the world access to reliable, lower carbon energy. We are focused on delivering secure, low-cost, and sustainable energy solutions through the safe and efficient development and operation of natural gas liquefaction and carbon capture and storage infrastructure. Through our subsidiaries, we are developing and constructing the Rio Grande LNG natural gas liquefaction and export facility near Brownsville, Texas, with approximately 48 MTPA of potential liquefaction capacity currently under construction or in development. We are also developing a potential carbon capture and storage project at the facility that is expected to make meaningful impacts toward a lower carbon future. NextDecade’s common stock is listed on the Nasdaq Stock Market under the symbol “NEXT.” NextDecade is headquartered in Houston, Texas. For more information, please visit www.next-decade.com.

About Baker Hughes

Baker Hughes (NASDAQ: BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. federal securities laws. The words “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “would,” “could,” “should,” “can have,” “likely,” “continue,” “design,” “assume,” “budget,” “guidance,” “forecast,” and "target," and other words and terms of similar expressions are intended to identify forward-looking statements, and these statements may relate to the business of NextDecade and its subsidiaries. These statements have been based on assumptions and analysis made by NextDecade in light of current expectations, perceptions of historical trends, current conditions and projections about future events and trends and involve a number of known and unknown risks, which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements. Although NextDecade believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that the expectations will prove to be correct. NextDecade’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in NextDecade’s periodic reports that are filed with and available from the Securities and Exchange Commission. The taking of a final investment decision on Trains 4 and 5 at the Rio Grande LNG Facility is 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. Additionally, any development of additional expansion trains at the Rio Grande LNG Facility or CCS projects remains contingent upon receipt of requisite governmental approvals, execution of definitive commercial and financing agreements, securing all financing commitments and potential tax incentives, achieving other customary conditions and making a final investment decision to proceed. The forward-looking statements in this press release speak as of the date of this release. NextDecade may from time to time voluntarily update its prior forward-looking statements, however, it disclaims any commitment to do so except as required by securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250310876591/en/

NextDecade Investors

Megan Light

mlight@next-decade.com

832-981-6583

Baker Hughes Investors

Chase Mulvehill

investor.relations@bakerhughes.com

+1 346-297-2561

NextDecade Media

Susan Richardson

srichardson@next-decade.com

832-413-6400

Baker Hughes Media

Chiara Toniato

chiara.toniato@bakerhughes.com

+39 3646 382 3419

Source: NextDecade Corporation

FAQ

What is the scope of NextDecade's framework agreement with Baker Hughes for Rio Grande LNG?

The agreement covers Baker Hughes providing gas turbine and refrigerant compressor technology plus maintenance services for Trains 4-8 at Rio Grande LNG Facility.

How much additional LNG capacity will Trains 6-8 add to NextDecade's Rio Grande facility?

Trains 6-8 are expected to increase NextDecade's total liquefaction capacity by approximately 18 million tonnes per annum.

What conditions must NextDecade (NEXT) meet before making final investment decisions on Trains 4-5?

NextDecade needs governmental approvals, EPC contracts, commercial arrangements, and adequate financing for construction.

What is the current development status of NextDecade's Rio Grande LNG Trains 6-8?

NextDecade is developing and beginning the permitting process for Trains 6-8, which are wholly owned by the company.