It took over a decade, but NextDecade's longshot bet to lead Texas LNG is finally paying off

Located near the U.S.-Mexico border, just a few miles from SpaceX's Starbase, NextDecade is positioned to become the leading exporter of natural gas from Texas. The company's extensive facility spans 1,000 acres along the Brownsville Ship Channel and has taken more than a decade to reach its current stage, overcoming significant challenges including skepticism from industry experts, the unexpected death of its founder, and contentious legal disputes with environmental groups.

Recent geopolitical developments, particularly the ongoing conflict in Iran and disruptions in supply from Qatar, have intensified the global focus on liquefied natural gas (LNG), which is necessary to convert natural gas into liquid form for transport by tanker. The United States has established itself as the premier LNG exporter in recent years, meeting the energy demands of markets across Europe and Asia.

Most LNG export capacity in the U.S. is concentrated along a corridor that stretches from Corpus Christi, Texas, to areas south of New Orleans. However, NextDecade's Rio Grande LNG facility is located approximately 160 miles south of Corpus Christi at the southernmost tip of Texas.

"The geopolitical volatility that we are witnessing has heightened awareness of the fragility of our global energy system, which is more vulnerable than many previously believed," stated NextDecade CEO Matt Schatzman in an interview with Fortune.

Since its establishment in 2010, NextDecade is finally preparing to bring the Rio Grande LNG project into operation—scheduled for early next year—with plans for continued expansion extending through 2036. The facility aims to add approximately one new liquefaction unit, or "train," each year. The initial phase includes three trains, which are expected to provide energy for more than 20 million households and is anticipated to be completed by early 2029. In total, ten trains are planned, with five currently under construction, collectively generating sufficient energy for 65 million households.

"I wish we could commence LNG production today, but it is imminent, and we are ahead of our schedule," Schatzman remarked. "If the current situation persists, we will contribute additional supply to the market, helping to alleviate some of the existing challenges."

Schatzman emphasizes that the justification for Rio Grande LNG's business model is independent of geopolitical events—the conflict in Iran serves only to strengthen the case for securing reliable U.S. natural gas supplies.

U.S. LNG's Rise

The United States was traditionally a natural gas importer until the shale gas revolution began two decades ago. The nation exported its first LNG cargoes in early 2016, and since then, the volumes have surged. The U.S. is now the largest LNG exporter globally, surpassing both Qatar and Australia, with capacities set to more than double between 2025 and 2030. The U.S. Energy Department anticipates total natural gas exports to increase by 30% from early 2026 to the end of 2027.

Industry pioneer Cheniere Energy leads the U.S. LNG sector, while competitors such as Sempra and the newer venture Venture Global are also expanding aggressively. NextDecade is positioned as the next major player. In early April, the Federal Energy Regulatory Commission approved NextDecade's proposal to convert to a continuous construction schedule, operating seven days a week alongside contractor Bechtel—a clear indicator of the urgency surrounding the project.

Qatar and Exxon Mobil's Golden Pass LNG project recently commenced operations near Port Arthur, Texas. Additional projects under development include Woodside Energy's Louisiana LNG, Commonwealth LNG in southwestern Louisiana, and Alaska LNG, jointly developed by Glenfarne and ConocoPhillips.

The Biden administration's 2024 LNG permitting "pause" was motivated by concerns regarding potential overcapacity. However, the situation surrounding the Iran conflict is shifting this narrative.

"Concerns about overbuilding and excessive supply were exaggerated," Schatzman asserted. "Natural gas demand has consistently grown at an average rate of around 1.8% annually, and we anticipate this will continue. We are expanding in response to the growth of global natural gas demand."

Factors such as global population growth, increased electrification, and the expansion of AI data centers are driving worldwide electricity demand, which is increasing by nearly 4% annually. The ongoing conflict may have various impacts on energy markets: it could expedite the transition to U.S. LNG, promote renewable energy developments, and extend the operational lives of coal-fired power plants. Schatzman recognizes that while the war may lead to some near-term "demand destruction" for LNG overall, he remains optimistic about the prospects for U.S. supply.

"Perhaps the turmoil in the Middle East and this tragic situation will elevate the recognition of U.S. LNG, not only for its adaptability—our clients can transport it globally—but also for its cost-effectiveness," he added. "It serves as a relatively economical insurance policy."

A Decade-Long Journey

When NextDecade was established in 2010 by Kathleen Eisbrenner, an industry veteran and a notably rare female CEO in the oil and gas sector, the venture was met with skepticism. At that time, the U.S. was not exporting LNG, and the chosen location at the remote Texas-Mexico border faced significant barriers such as a lack of pipelines and convenient access to gas supplies.

Eisbrenner selected Brownsville for its deepwater access, lower vessel traffic, and her forward-looking belief that the energy-rich Permian Basin in West Texas would eventually inundate the region with surplus natural gas. She was confident that the necessary pipelines would materialize.

Schatzman, who was then a senior vice president at BG Group—a company that would later be acquired by Shell—was among the early skeptics.

"Many experts believed this project would never come to fruition—claiming that constructing an LNG facility here would be prohibitively expensive due to the lack of pipeline infrastructure," Schatzman recounted. "I must admit, I did not initially share her vision. However, she persuaded me that the Permian would revolutionize the natural gas market in the U.S. She told me, 'Matt, there's going to be an abundance of gas from there, and this is the most economical route to transport it.' She was absolutely correct."

"Her vision was remarkable, primarily because I don't know anyone else who would have considered establishing an LNG project at the southern tip of Texas," he conveyed.

NextDecade encountered numerous hurdles in the intervening years, including delays prompted by the global pandemic, difficulties in securing long-term contracts, permitting challenges, and environmental lawsuits—all adding an ironic twist to the company's name, which aimed to signify a forward-looking, ambitious endeavor rather than signal a lengthy struggle spanning nearly 15 years to launch an $18 billion initial phase.

"That is her name, not mine," Schatzman said, with a wry smile, noting that he has never been particularly fond of it.

Joining the company in 2017 to oversee operations, Schatzman assumed the CEO role in 2018, as Eisbrenner transitioned to chairwoman.

Tragically, in 2019—just over a year after the leadership change—Eisbrenner passed away at the age of 58 following a reported fall and head injury at her home.

"Without her initial concept, we wouldn't be where we are today. That said, the most difficult aspect has been converting that concept into a reality. And that process has taken quite some time," Schatzman reflected. "It's a compelling narrative, illustrating perseverance through trials and tribulations."

With the Rio Grande LNG project nearing its first production milestone and a decade of planned expansions on the horizon, Schatzman pays tribute to the woman who laid the groundwork for this success.

"I firmly believe this is the optimal location for an LNG facility in the United States," he affirmed. "Kathleen merits recognition for her exceptional idea. I wish she were here to witness this achievement, but I'm confident she is looking down from above, hopefully with a smile."