What NextDecade Corp told the SEC could break it.

NextDecade's economics hinge on the spread between FOB LNG sales prices and its natural-gas feedstock/fuel costs — it targets a cargo margin of over $3.00/MMBtu on 175+ TBtu of LNG sales — so feedstock cost inflation or weak LNG prices would erode margins.

“We have entered into LNG sales agreements for the sale of over 175 TBtu of LNG on an FOB basis, with fixed liquefaction fees that are expected to achieve a cargo margin, calculated as the FOB LNG sales price less our expected costs of natural gas feedstock and fuel, of over $3.00 per MMBtu.”

NextDecade is concentrated in one mega-project — the Rio Grande LNG Facility (Phase 1 / Trains 4-5 under construction) — and expects no revenue until trains are completed; even after completion, financing and other factors may reduce cash flow and delay/eliminate distributions.

“We do not expect the Rio Grande Project Entities to generate any revenue until the completion of construction of the applicable phase of development of the Rio Grande LNG Facility or to generate any revenue from CCS systems until successful installation, and even after completion of construction or installation, financing and numerous other factors may reduce our cash flow.”

NextDecade is exposed to evolving US tariffs and retaliatory measures on LNG exports; changes in the US trade relationship with major LNG-importing nations could adversely affect or even trigger termination of its LNG sale-and-purchase agreements (SPAs).

“We face potential exposure to evolving U.S. tariffs, and potential retaliatory actions that may be imposed by other countries in response to U.S. tariffs, primarily on LNG exports. Any future changes to the United States' trade relationship with major LNG importing nations, including through the imposition of further tariffs, could have an adverse impact on any LNG SPAs entered into with customers based in such countries.”