Gulf Coast LNG project’s Train 5 closer to FID as ConocoPhillips signs up for 20-year offtake

U.S.-headquartered energy giant ConocoPhillips has struck a multi-year liquefied natural gas (LNG) deal with Houston-headquartered NextDecade Corporation, enabling the operator to secure sufficient commercial agreements for a positive final investment decision (FID) on the fifth train at its LNG export project in Texas, United States. 

Thanks to a long-term sales and purchase agreement (SPA) with NextDecade, ConocoPhillips, which will lift 1 million tonnes per annum (mtpa) of LNG from the Rio Grande LNG project under development near Brownsville, will offtake LNG over a 20-year term on a free-on-board basis, subject to the operator making a positive final investment decision on the project’s Train 5.

ConocoPhillips explains that its OCP CryoSep technology is utilized at the Rio Grande LNG facility to provide targeted recovery and/or removal of heavy hydrocarbons that would otherwise freeze or lead to high BTU content in LNG.

The firm continues to enhance its LNG supply network to meet growing energy demand, as illustrated by a long-term offtake agreement for 4 mtpa of LNG from Port Arthur LNG Phase 2, in addition to a prior agreement for 5 mtpa of LNG from Phase 1.

Khoa Dao, Chief Commercial Officer for ConocoPhillips, commented: “ConocoPhillips is pleased to announce our agreement with a premier operator in NextDecade at Rio Grande LNG, where we will be a key foundation customer for Train 5.

“We’re excited to help move this project closer to FID while advancing our global LNG portfolio strategy and 10 to 15 mtpa offtake ambition. We continue to build scale and diversification, adding supply and sales points offering further optionality for optimization.”

NextDecade continues to expect to achieve a positive FID on Rio Grande LNG Train 4 by September 15, 2025. As ConocoPhillips’ latest 20-year LNG SPA is for offtake from Rio Grande LNG Train 5, the operator underlines that the commercialization for this train is now complete.

With the latest deal, a total of 4.5 mtpa of LNG from Train 5 is sold under 20-year LNG SPAs, seen as sufficient to support a positive FID in the fourth quarter of 2025, subject to obtaining adequate financing, within the current price validity period for the company’s Train 5 EPC contract with Bechtel Energy.

The FID for Phase 1 of the Rio Grande LNG project was made in July 2023 when Bechtel won its second go-ahead in three months to proceed with the full construction of the project, after which the construction officially began in October 2023.

Matt Schatzman, NextDecade’s Chairman and Chief Executive Officer, highlighted: “ConocoPhillips has a long history of leadership in LNG and is an outstanding addition to our strong portfolio of LNG buyers from Rio Grande LNG Train 5. We have now completed commercialization of Train 5, and we are focused on finishing the financing and achieving a positive FID.”

NextDecade is developing and constructing the Rio Grande LNG natural gas liquefaction and export facility near Brownsville, with approximately 48 mtpa of potential liquefaction capacity currently under construction or in development.

Aside from its extension plans for the project to enable up to ten total liquefaction trains, the firm is also developing a potential carbon capture and storage (CCS) project at the facility, which is expected to contribute to a lower-carbon future.

Covering a 984-acre site near Brownsville, Rio Grande LNG is described as the first U.S. LNG project offering an expected emissions reduction of over 90%, thanks to the company’s proposed CCS endeavor to capture and permanently store over 5 million metric tons of CO2 per annum. 

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