NextDecade Corporation NEXT, a U.S.-based liquefied natural gas producer, announced that it has finalized contracts with Bechtel Energy for the construction of Train 4 and Train 5 at its Rio Grande LNG project in Texas. The combined value of the contracts is approximately $9 billion. The company signed engineering, procurement and construction (EPC) contracts with Bechtel for the construction of the two liquefaction trains at the facility.
EPC Contracts Include Pricing Validity Through September 2025
NextDecade is expected to pay Bechtel Energy approximately $4.77 billion in a renewed agreement for Train 4. For Train 5, the value of the EPC contract is about $4.32 billion. The EPC contracts include a pricing-validity clause, under which their current pricing can be extended through Sept. 15, 2025. This implies that Bechtel Energy will not increase the costs associated with the construction of the two trains before the specified date.
NEXT intends to reach a final investment decision (FID) on Train 4 of the Rio Grande LNG facility before the pricing-validity period associated with the EPC contract expires. Typically, an FID for such large-scale projects undertaken by LNG developers is reached only when they have secured enough supply agreements. These supply agreements are crucial for funding the construction and development of these facilities.
JERA Signs Long-Term LNG Supply Deal for Train 5
The company is also making progress in securing supply deals for Train 5 of the LNG facility. NEXT mentioned that JERA, the Japanese power generation firm, has signed a 20-year LNG supply deal for approximately 2 million tons per annum of LNG from the facility’s fifth train.
NEXT’s Zacks Rank & Key Picks
NEXT currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the energy sector are Flotek Industries Inc. FTK, Oceaneering International OII and RPC, Inc. RES. While Flotek Industries sports a Zacks Rank #1 (Strong Buy) at present, Oceaneering International and RPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading offshore equipment and technology solutions provider to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to its shareholders through consistent dividend payments and share buybacks, making it an attractive choice for investors seeking steady returns.
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