NextDecade（NEXT）2026年第3四半期決算説明会：初のLNGおよびキャッシュフローの見通し

主なポイント

• NextDecadeは、リオ・グランデLNGの第1系列（Train 1）からの最初のLNG生産見通しを2027年第2四半期へと絞り込みました。経営陣は、2027年第3四半期の実質的完工を予想しており、これはEPC契約に基づく保証スケジュールより1四半期早いタイミングとなります。
• 現在のLNGおよび米国天然ガスの先物価格に基づき、経営陣は、2026年序盤に先渡売却された175 TBtuの影響を含め、ランプアップ（立ち上げ）期間中に予想される未契約分数量の加重平均インプライド・マージンを1 MMBtuあたり6ドル超と試算しています。
• これらのインプライド・マージンを前提とすると、第1系列の操業開始から2031年第2四半期の第5系列による初の商業引き渡しまでの期間における、リオ・グランデLNGプロジェクトレベルの配当可能キャッシュフローのうちNextDecadeの持分は24億ドルを超えると予測され、ベースケースの20億ドルを20%以上上回る見込みです。
• 経営陣によると、建設工事は予算内で順調に進んでおり、計画を前倒しで進行しています。2026年9月時点で、第1系列および第2系列の進捗率は80%近くに達しており、第3系列、第4系列、第5系列の進捗率はそれぞれ55%超、22.5%、14%となっています。
• NextDecadeは、フェーズ1の銀行融資枠の当初設定額111億ドルのうち60%にあたる70億ドル超のリファイナンスを実施しました。9月30日時点における同融資枠の借入実行残高は約7億ドルでした。
• 同社は、2027年後半に第6系列の最終投資決定（FID）を下すのに十分な商業的合意の獲得を目指しています。経営陣は、第6系列の収益性が少なくとも第4系列や第5系列と同等以上に強固なものになると見込んでいます。

主要財務データ

第3四半期のリファイナンス活動には、固定金利5.15%〜6.15%、償還期限2031年〜2041年の35億ドルの144A私募債発行が含まれます。また、リオ・グランデLNGは利率6.72%、最終償還期限2047年12月の優先担保付社債5億7,500万ドルを発行しました。

事業および業績の動向

リオ・グランデLNGの敷地全体でフェーズ1の建設工事が順調に進展しました。2026年9月時点で、第1系列および第2系列のエンジニアリングと調達はほぼ完了し、建設工事は70%近くまで進行、試運転（コミッショニング）は5%に近づいています。第3系列の調達は90%を超え、建設工事は25%に近づきました。

第1系列では、電気・機械・ユーティリティシステムの試運転が進みました。ガス受入設備は操業開始の準備が整っており、ベイ・ランナー（Bay Runner）パイプラインは第3四半期中に運用を開始しました。経営陣は引き続き、2026年末までに最初の炭化水素（ガス）導入が開始されると見込んでいます。

第2系列については、メイン深冷熱交換器が設置され、コンプレッサーストリングの設置および事前芯出し（プレアライメント）が完了しました。第3系列の最初のコンプレッサーストリングも据え付けられました。また、第4系列および第5系列の初期建設工事も進展しました。

FERC（連邦エネルギー規制委員会）は、第1系列から第5系列の認可LNG輸出量を年3,015万トンへと引き上げることを承認しました。これは、これら5系列からの同社の予想年間生産量と一致しています。

現場では連日7,000名を超える作業員が従事しており、その70%以上が地元住民であることが確認されています。

経営陣の見通し（ガイダンス）

経営陣は、第1系列からの最初のLNG生産を2027年第2四半期、実質的完工を2027年第3四半期と見込んでいます。第2系列および第3系列についても、保証スケジュールより約1四半期早く実質的完工を達成する見込みです。

ランプアップ期間において、同社のベースケースシナリオでは、未契約数量に対して1 MMBtuあたり5ドルのマージン、およびNextDecadeに帰属する累計約20億ドルのプロジェクトレベル配当可能キャッシュフローを想定しています。現在のフォワードカーブ（先物価格曲線）では、1 MMBtuあたり6ドル超のマージンと24億ドルを超える配当可能キャッシュフローが示唆されています。

NextDecadeは、ランプアップ期間のキャッシュフローをまずFinCo（融資子会社）の残高に充当し、続いてSuperFinCoの利息または元本に充当する方針です。経営陣によると、現在の先物価格シナリオでは、リファイナンスやプロジェクトファイナンスの制限に従うことを前提に、安定期の負債目標達成に必要な額を約4億ドル上回るキャッシュが創出される可能性があります。

第6系列については、FERCによる最終環境影響評価書（EIS）が2027年6月に公表される見込みです。同社は、2027年後半に最終投資決定（FID）を執り行うに十分な長期LNG引取契約（オフテイク契約）の獲得を目指しています。経営陣は大幅な経済的権益を維持する方針ですが、高品質な戦略的LNGバイヤーを巻き込んだジョイントベンチャー（合弁事業）も検討する可能性があります。

第7系列および第8系列は、リオ・グランデLNG敷地の西側に位置する2系列一体型のプロジェクトとして計画されています。NextDecadeは2026年末までに事前申請（プレファイリング）を行う予定であり、許認可および開発スケジュールは第6系列から約1年遅れとなる見込みです。

リスクと注視事項

• 最初のLNG生産時期は、試運転、操業開始、および建設の実行状況に依存します。経営陣は、所定のプロジェクトファイナンスのマイルストーンや制限を満たすまで、プロジェクト会社から現金を外部へ流出させることはできないと認識しています。
• 予測されるマージンおよびキャッシュフローの上振れは、変動する可能性がある現在のLNGおよび米国天然ガスのフォワードカーブに基づいています。地域間価格差（ベーシス・ディファレンシャル）が拡大または縮小する可能性があります。
• 経営陣は、地政学的な供給中断がLNG価格の支援材料になると見ていますが、カタール産などの影響を受けた供給が確実かつ安定的に再開されるかどうかには不透明感があると指摘しています。
• NextDecadeはランプアップ期間中、大規模な未契約ポジション（エクスポージャー）を保持しています。経営陣は、現在のボラティリティの高い市場においてはロングポジションを維持することを好んでいますが、LNGの生産開始前に過剰に売却してしまうリスクについても強調しています。
• 第6系列の推進には、商業的合意、規制当局の承認、および追加調達が必要です。潜在的な資金調達手段としては、プロジェクトレベルのノンリコースローン、FinCo融資枠、株式または可換証券、そして戦略的ジョイントベンチャーの活用などが挙げられます。

アナリスト質疑応答のハイライト

経営陣は、第6系列の契約比率が第5系列の約75%を上回るものの、フェーズ1の約90%を下回ると予想していると述べました。投資適格格付けを持つ取引先との高い契約比率は、プロジェクトレベルでのより大きなノンリコースローン調達能力を裏付けると期待されています。

追加の先渡売却に関して、経営陣は現在の未契約ポジションに満足しており、現時点でこれ以上の数量を売却する計画はないと語りました。同社は、価格が下落する可能性もあるものの、ランプアップ期間後半における価格リスクは上振れ方向に非対称であると見ています。

過去に先渡売却された175 TBtuの期待マージンは、現在のインプライド水準である6ドル超ではなく、1 MMBtuあたり3ドル超でした。これらの売却実績は、同社の加重平均マージン試算に含まれています。

経営陣は、予想生産数量にボトルネック解消（デボトルネッキング）による潜在的な増加分は含まれていないと述べました。NextDecadeは、必要な設備投資に対するハードルレート（投資回収の基準）を満たすことを条件に、各系列が試運転および操業に入る段階で、より低コストで解消可能なボトルネックを特定して対処する計画です。

経営陣によると、一部のバイヤーが10〜15年の契約期間を求めるものの、長期LNG契約の期間は引き続き20年前後が中心となっています。同社は、第6系列からの供給に対する関心が、エンドユーザー、ポートフォリオプレイヤー、地理的分散を求めるLNGプロデューサーなど、幅広い層に広がっていると説明しました。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, and welcome to the NextDecade Corporation's Third Quarter 2026 Investor Call and webcast. [Operator Instructions] As a reminder, this conference is being recorded.

And now I'd like to turn the call over to your host, Megan Light, NextDecade's Vice President of Investor Relations. Thank you. You may begin.

Megan Light

Thank you, and good morning, everyone. Welcome to NextDecade's Third Quarter 2026 Investor Update Call and webcast. The slide presentation and access to the webcast for today's call are available on our website at www.next-decade.com.

Today, I am joined by Matt Schatzman, NextDecade's Chairman and Chief Executive Officer; and John Zuklic, NextDecade's Chief Financial Officer.

Before we begin, I would like to remind listeners that discussion on this call, including answers to your questions, contains forward-looking statements within the meaning of U.S. federal securities laws. 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.

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.

In addition, discussion on this call includes references to certain non-GAAP financial measures such as distributable cash flow. A definition of and additional information regarding these measures can be found in the appendix to our presentation. And now I will turn the call over to Matt Schatzman, NextDecade's Chairman and Chief Executive Officer.

Matthew Schatzman

Thank you, and good morning. We continue to make excellent progress toward first LNG production at Rio Grande LNG. Phase 1 construction remains safe, on budget and ahead of schedule.

We remain on schedule to introduce hydrocarbons into the facility before year-end. Today, we are narrowing our guidance for first LNG production from Train 1 to the second quarter of 2027, consistent with the early volume guidance we provided earlier this year and are reaffirming today.

Train 1's guaranteed substantial completion date is near the end of the fourth quarter of 2027. We expect Bechtel to achieve substantial completion in the third quarter of 2027, which is one quarter early.

Trains 2 and 3 also remain ahead of schedule and aligned with our early volume guidance. During the quarter, the main cryogenic heat exchanger was installed for Train 2 and the first compressor stream was set for Train 3.

We expect both trains to achieve substantial completion about one quarter ahead of their guaranteed schedules, consistent with Train 1.

As outlined in our early volume and cash flow guidance, commissioning and early uncontracted volumes from RGLNG Trains 1 through 5 provide valuable market exposure to next decade over the next few years and the current LNG market dynamics are very favorable.

Spot LNG prices remain strong and have increased materially over the last year due to the loss of supply from the Middle East. Based on current forward LNG and U.S. gas prices, we estimate the volume weighted average implied margins on the projected uncontracted volumes from Train 1 start-up in 2027 through the date of first commercial delivery under the Train 5 long-term SPAs at RGLNG, together with the impact of the 175 TBtus we sold forward in Q1 of this year to average over $6 per MMBtu, more than $1 per MMBtu above our base case guidance.

Using these estimated implied margins for our projected uncontracted volumes, NextDecade's share of Rio Grande LNG project level distributable cash flow during this period would total over $2.4 billion or over 20% above the projected $2 billion of cash flow in our base case guidance.

Each $1 per MBtu change in the estimated volume weighted average implied margin on our uncontracted volumes from Train 1 start-up through Train 5 DFCD, including the impact of the additional 175 TBtus sold in Q1 would change NextDecade's projected share of project level distributable cash flow by approximately $350 million to $400 million over the forecast period.

As of September 2026, Trains 1 and 2 were nearly 80% complete. Engineering and procurement were nearly finished. Construction was almost 70% complete and commissioning was approaching 5%. Train 3 was more than 55% complete with engineering nearly finished, procurement above 90% and construction approaching 25%. Train 4 was 22.5% complete and Train 5 was 14% complete.

During the third quarter, electrical, mechanical and utility commissioning advanced on Train 1. More than 100 operations personnel [indiscernible] Bechtel in the second quarter are working alongside its team and will remain through commissioning and start-up to support a smooth transition to operations.

During the third quarter, installation and prealignment of Train 2's compressor strings were completed and its main cryogenic heat exchanger was installed. Train 3's first compressor string was set.

Foundation ports began for Train 4's main cryogenic rack along with the excavation of its refrigeration area. Soil stabilization using the direct mixing method began for Train 5.

Tank 1 completed inner tank nickel plate welding and its first hydro test. Piling advanced for Tank 3 and began for Tank 4. Site-wide dredging for the burst turning basin and channel deepening is complete. The gas inlet facilities are ready for startup and the Bay Runner pipeline entered service during the third quarter. More than 7,000 workers are now on site each day with over 70% of them local residents.

We are proud to provide safe, high-quality, long-term jobs that make a meaningful impact in the Rio Grande Valley. Across the site, commissioning of systems is underway to support initial hydrocarbon introduction before year-end.

We made meaningful regulatory progress during the third quarter. FERC approved our upgrade request for Trains 1 through 5, increasing authorized LNG exports from those trains to 30.15 million tons per annum, consistent with our expected annual 5-train LNG production.

As we mentioned on our last call, in July, FERC released its schedule of environmental review for Train 6 and the final environmental impact statement is expected in June of 2027. In September, the U.S. Army Corps of Engineers authorized a key construction permit for Train 6 in record time, reflecting our team's disciplined preparation and effective regulatory engagement.

We're advancing commercial discussions with multiple high credit quality counterparts for long-term Train 6 LNG offtake. Demand for our long-term LNG for Rio Grande LNG remains strong across a global customer base.

Since the Iran conflict began in February, the global LNG market has tightened significantly and forward prices for 2026, 2027 and beyond have risen. Potential long-term buyers have also placed greater emphasis on energy security and supply diversification.

These priorities have been prominent since the Russian-Ukraine conflict began in 2022 and have intensified this year. As we have said, long-term LNG supply from Rio Grande LNG offers buyers an effective combination of attractive pricing and supply security.

United States abundant diversified natural gas resources and our competitive LNG construction costs support affordable, reliable long-term supply and help protect customers from regional natural gas and LNG price spikes.

We expect to advance long-term Train 6 offtake discussions while permitting proceeds with the goal of securing sufficient commercial support to enable a positive final investment decision or FID in the second half of next year. Long-term LNG contract pricing has remained strong since we contracted Trains 4 and 5.

Based on current market conditions, we expect Train 6 returns to be at least as strong as those trains. Given that outlook, our goal is to retain a substantial economic interest in Train 6, which NextDecade currently wholly owned, although we may consider a joint venture tied to a high-quality strategic LNG offtake.

We continue to evaluate capital raising options for our projected Train 6 equity commitments with a focus on maximizing shareholder value. We expect additional FinCo capacity to fund part of Train 6 equity requirement and are evaluating alternatives for the balance with a focus on the most accretive per share solution.

Finally, we selected the western end of the Rio Grande LNG site for Trains 7 and 8. We expect to prefile with current before year-end. The schedules place Train 7 and 8 roughly 1 year behind Train 6 in permitting and development.

I'll now turn it over to John.

John Zuklic

Thanks, Matt, and thanks to everyone for joining us on the call today. During the third quarter, we continued to execute our project level balance sheet strategy of terming out bank facility debt through opportunistic debt capital markets transactions, which during the third quarter included approximately $4.1 billion of senior secured notes issued by Rio Grande LNG LLC, our Phase 1 financing entity.

These refinancings extended and staggered our debt maturity profile while also releasing committed bank capacity for financing Train 6 and subsequent expansions.

We have now refinanced over $7 billion or 60% of the $11.1 billion of initial capacity under the Phase 1 bank facilities, leaving drawn balances under those facilities of approximately $700 million as of September 30. As we mentioned on our last call, in July, Rio Grande LNG LLC issued $3.5 billion of senior secured notes in its inaugural 144A offering.

These notes, which were rated BBB- by S&P and Fitch were issued in 4 tranches with maturities ranging from 2031 to 2041 and with fixed rates ranging from 5.15% to 6.15%. We used proceeds from the offering, net of fees to reduce outstanding balances on the Phase 1 bank facilities.

In conjunction with the 144A offering and the $1 billion term loan we entered into at a Phase 1 holding company in late June, we unwound a portion of our interest rate swaps associated with the bank debt those transactions repaid, resulting in $109 million settlement received in July, which we used to further reduce our Phase 1 bank borrowings.

Then in September, Rio Grande LNG LLC issued another $575 million of senior secured notes in a private placement transaction. The notes, which bear interest at 6.72%, will amortize over a period of approximately 18.5 years, beginning in June 2029 with a final maturity in December 2047.

Similar to the previous 2 issuances noted, we also utilized proceeds from this transaction to reduce outstanding borrowings under the Phase 1 bank facilities and to pay transaction-related fees and expenses. We're very pleased with the market response to our recent financings.

There has been tremendous demand for and interest in Rio Grande LNG project level credit. As an indication of that interest, the 144A offering in July was 4x oversubscribed and the notes priced at the tight end of our expected range.

As we've said previously, we expect to continue to opportunistically capitalize on robust market opportunities as we seek to refinance the remaining Phase 1 bank facility balances as well as the project level bank facility balances for Trains 4 and 5, which consisted of approximately $900 million drawn on the Train 4 bank facility and no outstandings under the Train 5 bank facility as of September 30.

Two additional financial transactions I would like to note are the July issuance of a $100 million installment and subsequent to the third quarter, the October issuance of a final $150 million installment of the Train 5 6.56% senior secured notes due 2050, which were issued pursuant to the note purchase agreement entered into in conjunction with the positive final investment decision on Train 5 in October 2025.

The full $500 million of these Train 5 senior secured notes have now been issued and remain outstanding. There's also one minor accounting item that I would like to mention before moving to our NextDecade level debt discussion.

In the third quarter, we moved proceeds from vessel subchartering to other income net on our income statement, where it will be recorded until we begin operations. Subchartering proceeds were previously recorded as an offset to operating and maintenance expense.

We made this adjustment because we believe presenting subchartering proceeds and other income net provides a more helpful view of our activities and operating expenses. Once we begin operations, we expect any proceeds from subchartering vessels to be recorded as part of revenue on our income statement.

Next, I'd like to talk about our leverage above the project companies up at the NextDecade level. Since I joined the company in July, we received a fair number of questions about our capital structure and I'd like to take a few minutes to better explain our current balance sheet, debt targets and near-term capital priorities.

In February of this year, we introduced a steady-state NextDecade level unconsolidated leverage target comparing NextDecade level debt to NextDecade share of Rio Grande LNG project level distributable cash flow less NextDecade level G&A.

For purposes of this leverage ratio, NextDecade level debt excludes debt at the project and project holding company levels, which is consolidated on the NextDecade balance sheet but is nonrecourse to next decade.

This NextDecade level debt currently consists primarily of the SuperFinCo and FinCo term loans we entered into to fund the majority of our equity commitments for Trains 4 and 5 and relatively small corporate loans outstanding at the Super Holdings level.

And for purposes of this leverage ratio, NextDecade share of Rio Grande LNG distributable cash less NextDecade level G&A, which excludes noncash compensation and also excludes G&A at the project and project holding company levels effectively represents cash expected to be available for NextDecade level debt service after the impact of debt service at the project level.

Using our base case guidance, which assumes $5 per MMBtu average margins on uncontracted cargoes during our ramp-up period, the leverage target we provided previously is consistent with NextDecade level debt of approximately $2 billion to $2.25 billion when steady-state operations begin following the date of first commercial delivery or DFCD for Train 5 long-term SPAs in the second quarter of 2031.

We believe this NextDecade level debt range will ensure a strong credit position into steady-state operations given that the distributable cash flows from the Rio Grande LNG projects are underpinned by long-term SPAs on approximately 85% of the total expected Rio Grande LNG production volumes with high-quality investment-grade customers with a weighted average life of 19.5 years and provide a strong visibility and predictability during steady-state operations.

As a reminder, we are committed to using NextDecade share of project level cash flows generated during our ramp-up period from Train 1 start-up through DFCD of Train 5 SPAs to reduce a portion of the term loans we entered into to fund the large majority of our equity commitments for Trains 4 and 5.

In our base case early volume and cash flow guidance, which assumes $5 per MMBtu margins on uncontracted volumes, we expect NextDecade's cumulative share of Rio Grande LNG project level distributable cash flow to be approximately $2 billion, which we will use to first pay down FinCo balances, then to pay SuperFinCo interest and/or principal balances.

In our base case, applying the projected approximately $2 billion of early cash flows to NextDecade level debt repayment results in NextDecade level debt that is within our target range of $2 billion to $2.25 billion when we enter steady-state operations.

As Matt mentioned earlier in the call, market conditions have improved meaningfully since the Iran conflict began 8 months ago, and today's forward curves imply LNG margins that exceed our base case guidance. With current volume weighted average estimated margins implied by the forward curves over our ramp-up period of over $6 per MMBtu, we would expect our share of project-level distributable cash flow to be over $2.4 billion for the ramp-up period of 2027 through the second quarter of 2031 or over 20% above our base case, which would result in projected cash flow generation in excess of what is needed to achieve our target debt range.

And finally, I wanted to note that our downside steady-state guidance case assumes $3 per MMBtu margins on uncontracted volumes during our ramp-up period. In this case, we assume that we contract an additional approximately 2 million tons per annum of capacity from Trains 4 and 5 under long-term SPAs which would enable us to increase Train 4 and 5 project level debt and therefore, reduce our NextDecade level debt down to a level consistent with our target.

But given current market conditions, we do not expect to contract additional Train 4 and Train 5 volumes to achieve our steady-state NextDecade leverage guidance.

With that, I thank you again for joining the call today, and we'll open up the line for questions.

Operator

[Operator Instructions] Our first question comes from Olivia Foster with Goldman Sachs.

質疑応答

Olivia Halferty Foster

I wanted to start on the operating front following the narrowed first LNG guidance on Train 1. Could you walk us through your expectations for commissioning milestones that underpin the second quarter '27 first LNG target?

Similarly, could you walk us through your expectations for timing on the commissioning processes broadly from first gas to first LNG to balance of plant commissioning to Train 1 substantial completion?

Matthew Schatzman

As we mentioned in our commentary and in our presentation that's available on our website, we've narrowed our guidance for first gas in the facility for the fourth quarter of this year. We now expect first LNG production in Q2 of 2027 and substantial completion of Train 1 in Q3 of 2027, which is one quarter ahead of the guaranteed schedule in our EPC contract with Bechtel.

I think that -- I believe that provides the market a very good indication as to the milestones that they should expect to see. I think we've laid them out fairly clearly. As we get closer to first LNG production and we have the opportunity to engage with the market, we will be able to provide even hopefully more specificity on the months that we expect to see the first LNG production and the exact month of expected substantial completion.

Olivia Halferty Foster

That's clear. For my second question, I wanted to ask on the commercial front, particularly given ongoing LNG supply disruptions globally, how should we think about NEXT's ability to announce long-term SPAs for potential Train 6 FID by the second half of '27?

What details can you share on the types of counterparties from which you are seeing the most interest, particularly following the Qatar headlines this morning? And then maybe zooming out in the context of ongoing supply disruptions, how would you expect a bid for LNG supply security to drive potential contracting activity on potential Rio Grande capacity beyond Train 6?

Matthew Schatzman

Thank you. Yes, like I said in my comments, we've seen an increased interest in our LNG out of Rio Grande LNG as well as other U.S. LNG projects. After the Ukraine invasion and now that's ramped up even more with the Middle East conflict and the disruption of LNG in the region, I think it puts U.S. LNG, specifically Rio Grande LNG in an excellent position to sell more LNG out of our expansion capacity. I think the timing of this is absolutely perfect.

As far as the timing of when we're going to be announcing SPAs, we've said that our plan is to commercialize the facility during the time that we'll be permitting it. So we are in the midst of permitting at FERC.

We filed a formal application. We've received our schedule when we expect to get the final EIS. And we expect the approval from FERC not soon thereafter the final EIS is issued. So we expect to FID in the second half of next year.

So you should expect to hear announcements on SPAs over the coming months as we approach those deadlines around the FERC issuing its order and our expectations to FID in the second half of next year.

Operator

Our next question comes from Doug Irwin with Citi.

Douglas Irwin

I wanted to start with the ramp period volumes. You've obviously sold the 175 million tons already, but could you maybe speak to your ability to potentially sell some additional volumes here to take advantage of the current spread environment? Is that something you're maybe more comfortable doing now that you have better line of sight to first LNG on Train 1?

Matthew Schatzman

So as you can see on Slide 39 in our corporate presentation, we highlight very specifically the -- our expected available volumes that are uncontracted for certain periods of time like 2027 to Q1 of '29, Q1 of '29 to Q3 of 2030.

So I think you're referring to those orange bars on that slide, which is in total during our ramp-up period, 100 TBtus of available volume. Right now -- we have said in the past that we got the question about whether or not we plan to forward sell more volumes.

We're very, very comfortable with being long 1,100 TBtus during this period of time. And importantly, we're about 700-plus million TBtus long -- excuse me, 700 TBtus, not million TBtus, 700 TBtus long from Q1 '29 to Q2 2031. That period of time is not trading as high as '27 and '28.

I'd say on average, those margins are probably more in line with our $5 guidance case. And we see the risk in that period as asymmetric to the upside. We think, obviously, prices could retrace down the road, maybe come off $1 or $2.

But considering the situation in the Middle East, we're really not anticipating that situation to resolve very soon, and we could continue to see volatility in the region, which could create more upside for those volumes. So at this stage, I think we're comfortable not forward selling more of this volume, especially those volumes on the back end of the period of time that's in question.

Douglas Irwin

Yes. That's helpful. And maybe a follow-up around Train 6 financing expectations. Just wanted to get your latest thoughts on how you expect to finance it, kind of what are the next milestones to look for? And kind of more broadly, does an improved margin outlook here during the first phase maybe give you a little bit of increased flexibility just throughout the process as you think about those options?

Matthew Schatzman

I'll turn that to John. Thanks for the question.

John Zuklic

Yes. Thanks, Doug. As far as funding Train 6, first of all, I'll just start back at the -- and we talked about this a little bit of the contracting. We expect to contract a large portion of the capacity of Train 6 with long-term SPAs.

And we've kind of said in the past, more than Train 5, more than that 75%, likely less than Phase 1, 90%, so somewhere in there. But that large percentage of contracted volumes, long-term investment-grade SPA offtake part is going to allow us to maximize the project level nonrecourse debt. That's number one in reducing kind of the equity need there.

And then as far as the equity, we expect to maximize the use of our attractively-priced FinCo debt structure. And that's exactly why you hear us now refinancing bank capacity in Trains 1 through 5 to free up that capacity for Train 6.

So we like that pricing. We like the delayed draw feature of that. So we think that's an effective thing. And then after that, obviously, the remainder will be funded with some form of equity or convertible instruments. And of course, we'll look to -- at the time, we'll look to maximize sort of the accretion for the shareholder at that point, but that's something we'll look at, at the time.

And finally, I'd just say that when you think about the equity lift from our perspective, we think it's a very attractive project. We'd like to take a large portion, if not all, but we're also open to JV-ing with a strategic partner some level of it, retaining majority interest in it, but that sort of partnership that we may consider would also reduce the equity lift from a NextDecade perspective.

Matthew Schatzman

Yes. And I'll add on that last part that any sort of strategic structure that we're looking at, John and I are focused on maintaining a value for our shareholders that would not dilute in any way if we had just done it on our own.

So it's not necessarily that we're trying to -- that we would be giving away equity. We'd be basically structuring in such a way that it maintains or maximizes value for our shareholders. It doesn't take anything away.

Operator

Our next question comes from Jason Gabelman with TD Cowen.

Jason Gabelman

I wanted to go back to the exposure that you've locked in here, the 175 TBtu. Is that in line with the $6 per MMBtu margin that you're seeing over the next few years?

I know you locked it in earlier in the year before margins really stepped up. So wondering if you can remind us what margins are there. And then as capacity comes online and it seems like construction is progressing better than previously expected, do you expect -- is there kind of upside to the spot volumes that you could have over the next, call it, 12 months or so?

Matthew Schatzman

So on the first question about the 175 TBtus, we -- you'll recall, we disclosed that when we did those, the margins that we expected to achieve on that were north of $3. So when we talk about the $6 weighted average price, it includes the impact of the volumes that were sold under those -- that 175 TBtus and the price that we sold it for.

So the answer to your question is no, they're not the same $6 margins, but the margins associated with those sales are included in our weighted average $6 price, $6 margin that we're referring to.

As far as the potential to produce additional volumes, all the volumes that we have in our projections do not include the potential to debottleneck the facilities. And there's always a chance that some of the trains could start up earlier than what we projected, including Train 1.

But we're very, very confident now in the volumes that we provide in our guidance based upon the current ramp schedule and the discussions we've been having with Bechtel and the progress we've been making with the project.

Jason Gabelman

Great. And my follow-up is since we're approaching start-up, I was hoping you could refresh us on how the cash flow distribution will work from Rio Grande up to the NextDecade level. Is it just a straight 20% payout from day 1? Or is it a bit more involved than that?

Matthew Schatzman

So we have -- thank you, and I'll turn this -- the latter half of this over to John to kind of explain the whole thing as far as where the cash flow is going to go and how it's going to be utilized. We have not provided detailed guidance on the exact structure of the waterfall between us and the financial investors.

What we have provided, I believe, is a lot of clarity around based upon certain outcomes, whether that's a $3 margin, a $5 margin. Now we're giving you guidance on what each additional dollar of margin on a weighted average basis, what impact that would have on the cash flow that we expect to achieve during this period of time, which we call the ramp-up period.

Let me turn it over to John to explain again what we plan to do with the cash flow that we're going to produce during the ramp-up period.

John Zuklic

Yes. And I'll just -- thanks, Matt. I'd just reiterate that we don't look at it kind of annually. We look at it over the entire ramp-up period because to your point, there's a little bit more nuanced than straight up, but that's exactly why we structure our cash flow guidance when we look at the entire ramp-up period from first LNG to Train 5 DFCD.

So -- and there's a few reasons for that. First of all, as with most typical project finance restrictions, cash is not allowed to leave the project companies until certain milestones are met. So even when we get into production, there'll be cash remaining in the project companies for those restrictions.

At the point cash can leave the project companies, they go to the investors as well as NextDecade. The NextDecade portion of those distributions from the project company is required to pay down, as we talked about, the FinCo and SuperFinCo debt. And so that's the next step in that evolution.

And then think about -- sorry, FinCo being maturing in late or fourth quarter 2030. At some point there or at least before steady-state, we expect to refinance both FinCo and SuperFinCo for a few reasons.

One, get us more attractively priced debt than we currently have; and secondly, open up flexibility to be able to allow for use of that cash. When we do hit steady-state at the end of DFCD of Train 5, as we said, our guidance case at $5 would have $2 billion.

Our current forward curve look would have us at $2.4 billion, which is kind of in line with the guidance we give that for every dollar of increase in margins over this period, we expect to generate an additional $350 million to $400 million.

As we said, we need to generate about $2 billion, consistent with our guidance case to get us within that $2 billion to $2.25 billion of debt at the NextDecade level.

So at current forward prices indications, that would have us -- giving us excess cash of about $400 million. After we refinance FinCo and SuperFinCo, we'd be able to use that cash, that incremental cash once we've met our debt target to fund subsequent trains or even distribute, but we'll make those capital allocation decisions a lot closer to that point.

Operator

Our next question comes from Wade Suki with Capital One.

Wade Suki

Just going back to, I think, Olivia's question earlier on in the call on commercial activity and kind of the dialogue you're having there, I was just wondering if you might be able to kind of more broadly characterize the types of customers? Are these mainly consumers, maybe portfolio players, combination thereof? And any read-throughs regionally or whatever you can give us, that would be great.

Matthew Schatzman

Thanks for the question, Wade. All of the above. I wouldn't say there's anything specific in the LNG market that I would highlight, except for a trend that we actually kind of started with, with our Train 4 and 5 and it obviously appears to be accelerating, which is an apparent diversification that is occurring in the Middle East with some LNG producers there, include our partner, ADNOC XRG, who is an LNG producer, has invested in our project as an offtaker.

But you're actually seeing Qatar now diversifying their portfolio outside of Qatar beyond Golden Pass to where they're now buying from third-party projects.

I think that's a very interesting thing that's occurring, and I think it highlights the fact that the global market for LNG is starting to look for reliability, not just price and that now that we have a destabilized location that represents currently 20% of our LNG supply, customers are starting to focus more on that.

They already were, but they're starting to focus on even more. It's highlighted more lately. So all of our customers are very focused on the reliability, the certainty of supply as well as price. Price is still really important.

It's a competitive market. Prices haven't increased from our last discussions. The ranges of outcome, we still think are in the same range they were last time we spoke, equal to or higher than what we were achieving in Train 5, so still a strong market.

But I think importantly, this massive spike in LNG pricing has not driven the long-term market price up dramatically. And that's good for our customers. We can manage that, and we can still have very healthy returns on Train 6, 7 and 8 with the type of marketing prices that are currently out there.

But it's very good for our customers and very good for demand growth in LNG because we can -- with the U.S. gas pricing where it stands today and where we expect it to be over the next 10 to 20 years, we can provide a very reliable, cost-effective natural gas supply to these companies and the countries that they serve.

Wade Suki

Appreciate that. Appreciate the answer, and my second question there without me having to give it away on the long-term pricing. So I'll ask another one then maybe shifting to the expansions, Train 7 and 8 kind of beyond Train 6.

I think you mentioned these perhaps moving forward. I want to say you said like a year lag. Are you thinking -- just to clarify, are we thinking Train 7 a year later and then Train 8 a year later after that? Or could you see these actually moving ahead pretty close together or if not simultaneously?

Matthew Schatzman

Yes. Thanks for the question. I'll make it very clear. 7 and 8 are one project. They're not going to be sequenced one train at a time. We'll be prefiling those here in short order. So the market will get a better indication of what the project looks like.

But it's 2 trains, expect another berth and expect a couple -- maybe 1 or 2 tanks. So it is a stand-alone project separate from our GLNG Train 1 through 6.

And as we said in our comments and on our presentation, we are now highlighting that we're going to do that on the western side of our facility. We're going to leave the eastern side for any further development for potentially the next 2 trains. That's where we could put Trains 9 and 10 if we do them in order. We are going to do them in order. That may sound like a warrant. We're going to do them in order. 9 and 10 will be on the east.

Operator

Our next question comes from Alexander Bidwell with Webber Research.

Alexander Bidwell

Just wanted to circle back over to SPAs. You touched on pricing earlier. But can you give us any color on what you're seeing in terms of appetite for tenure? I know we've seen a number of recent SPAs out of the U.S. coming in north of 20 years. Do you see that as a meaningful representation of demand around tenure?

Matthew Schatzman

Thanks for the question. I think the tenure is still coalescing around 20 years is the standard contract. There are customers out there looking for shorter 10 to 15. But even European customers are willing to do 20 years.

That was an issue. I think they've figured out how they can do that. I think the longer-term contracts are -- there are some out there, but I think they're the exception, not the norm.

Alexander Bidwell

Okay. That makes sense. And then I wanted to also circle back on debottlenecking. Can you walk us through how you're thinking about any of those potential debottlenecking opportunities? Would it be -- would you potentially pursue debottlenecking on T1 through 3 before 4 and 5 are finished? Or is it something that's more of a long-term goal?

Matthew Schatzman

We've had a team in place that's been focused on optimizations for quite some time. So the plan is once we start operating these facilities, the keys are turned over to us at substantial completion for each train. The teams will -- and even during commissioning is to understand what the bottlenecks are going to be and to put them into a hierarchy of lowest cost to achieve outcomes to the highest cost and knock out that low-hanging fruit as quickly as possible.

So expect us to be focused on this from -- we're already focused on it, but from day 1, once the operations are turned over to NextDecade, we get the keys, we'll be trying to debottleneck as soon as possible.

And if there's any capital investment required, clearly, we'll be -- if it hurdles properly for our returns, we'll be focusing on trying to do that as soon as possible for Trains 4, 5 and 6 and probably working that into the construction if it makes sense.

Operator

Our last question comes from Craig Shere with Tuohy Brothers.

Craig Shere

I want to dig into Doug's questions about contracting out the $6-plus margins. I understand the 725 TBtu from first quarter '29 to second quarter 2031 is not that liquid.

It's further out there. The pricing is not as good and you're more optimistic than the market and you want to wait it out. That makes sense. But you still have this 375 TBtu open before that.

And it kind of feels like if you're able to do something with that by the first half of next year, that might make some of your Train 6 total financing plans a little easier. And then with respect to your $6-plus netbacks that you kind of alluded to, is it fair to say that, that does not assume any Herculean assumption around advantaged feedstock, which may be attractive?

Matthew Schatzman

You're talking on the basis differential?

Craig Shere

Yes. Yes.

Matthew Schatzman

I'd say that basis -- as we've said before, when we look at our margins, we've taken a snapshot of everything that's in the margin of producing LNG, including the gas cost. But is there a possibility that basis differential could continue to blow out during this period of time? Yes, it's possible.

It could narrow as well. But going back to your question about the volumes that are available in the short term kind of '27 and '28, look, I think we're comfortable with the 175 TBtus we've already sold.

The market price has changed pretty dramatically during this period of time and it's much, much higher prices. And I think we have to be mindful of both sides of this equation now, which is we're an LNG project in start-up. We're not producing LNG right now.

And we want to be mindful of the fact that we're extremely confident in the timing and our ability to ramp this up to achieve these volumes that we don't want to get too far over our skis, sell everything out and then have some sort of disruption where we are short in this market. I'd rather be long with the current volatility that we're seeing than short.

Now if it looked like there was a lot of LNG coming back into the market in short order, and it was going to be there on a reliable basis, and I'm speaking to the Qatari volumes, and we think things are going to start to soften, then we'll probably have a different view.

But Craig, I'm of the view right now with respect to the Qatari volumes that they may come back from time to time. But it's not going to be a reliable supply. So we could see disruptions from time to time that could cause massive upticks in pricing on a short-term basis. And being long during this period of uncertainty, we think is more valuable than hedging the short-term price risk that exists.

Craig Shere

Got you. And last one for me. Just logically, when you've got one EPC contractor for a 3-train FID and the first one comes online a quarter early, it kind of feels like there should be some additive impact to that. While we were a quarter ahead on the first train, now we can put more total manpower on finishing the second train. It kind of feels like just each train being a quarter early versus the original guarantee date still sounds very conservative.

Matthew Schatzman

Let's just see what happens. I'll leave it at that, Craig. Thank you.

Operator

We have reached the end of the question-and-answer session, and this concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.