ConocoPhillips Expands LNG Portfolio with Long-Term Supply Agreement at Rio Grande LNG
ConocoPhillips (NYSE: COP), one of the world’s largest independent exploration and production companies, has announced a significant step forward in expanding its liquefied natural gas (LNG) business. The company has signed a long-term sales and purchase agreement (SPA) with NextDecade Corporation (NASDAQ: NEXT) to secure additional LNG supply from the planned Rio Grande LNG export facility, located near Brownsville, Texas.
Under the terms of the newly signed agreement, ConocoPhillips will purchase and offtake 1 million tonnes per annum (MTPA) of LNG from Train 5 of the Rio Grande project. The deal is structured as a 20-year agreement, with delivery to be made on a free-on-board (FOB) basis. However, the agreement remains contingent on NextDecade making a positive final investment decision (FID) on the construction and development of Train 5.
This latest contract highlights ConocoPhillips’ ongoing commitment to building a diverse and flexible LNG portfolio that supports global energy security while responding to rising demand from markets across Asia, Europe, and beyond.
Strengthening ConocoPhillips’ LNG Portfolio
Khoa Dao, chief commercial officer for ConocoPhillips, emphasized the importance of this deal in the context of the company’s broader LNG growth strategy. “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,” Dao stated. “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.”
The reference to “10 to 15 MTPA offtake ambition” signals ConocoPhillips’ broader goal of becoming one of the leading players in global LNG supply. By securing LNG volumes from different projects, the company is diversifying both geographically and commercially. This strategy provides flexibility to optimize trading opportunities, balance customer demand, and strengthen energy security commitments to importing nations.
NextDecade’s Rio Grande LNG Project
The Rio Grande LNG project, spearheaded by NextDecade, is a massive export terminal being developed on the Gulf Coast of Texas. Designed to consist of multiple liquefaction trains, the facility is expected to become one of the largest LNG export hubs in North America once fully operational.
NextDecade’s vision is to not only develop a world-class LNG export facility but also make Rio Grande LNG one of the most sustainable projects in the sector. The company has proposed incorporating carbon capture and storage (CCS) technologies at the site to significantly reduce the facility’s emissions profile. If successful, Rio Grande LNG could position itself as a leader in low-carbon LNG exports, a key competitive advantage in an industry increasingly focused on sustainability.
Train 5, the focus of ConocoPhillips’ agreement, represents an expansion phase of the project. While the first four trains have already attracted substantial commercial interest, the addition of long-term customers like ConocoPhillips helps push the next phase toward financing and final investment approval.
Technical Contribution: OCP CryoSep® Technology
Beyond being an offtaker, ConocoPhillips is also contributing technology expertise to the Rio Grande LNG project. The company’s OCP CryoSep® technology, which is already incorporated into the facility’s design, plays a critical role in enhancing LNG processing.
The OCP CryoSep® system provides targeted recovery and removal of heavy hydrocarbons from feed gas streams. Without this step, heavy hydrocarbons could freeze during liquefaction or cause LNG to have an excessively high heating value, limiting its compatibility with certain markets. By integrating OCP CryoSep®, Rio Grande LNG can ensure higher efficiency, product quality, and operational reliability.
This offering reflects ConocoPhillips’ deep history in LNG technology. The company has been at the forefront of LNG liquefaction process development, particularly with its Optimized Cascade® technology, which has been deployed worldwide for decades. The use of OCP CryoSep® at Rio Grande further strengthens ConocoPhillips’ reputation not only as an LNG supplier but also as a technology innovator in the sector.
Expanding LNG Commitments in the U.S. Gulf Coast
The Rio Grande LNG agreement adds to a growing list of LNG deals secured by ConocoPhillips across the U.S. Gulf Coast. Most recently, the company entered into a long-term offtake agreement for 4 MTPA of LNG from Port Arthur LNG Phase 2, in addition to an earlier commitment for 5 MTPA from Phase 1 of the same project.
Taken together, these commitments represent a substantial build-out of ConocoPhillips’ LNG supply base in North America. The Gulf Coast has become a global hotspot for LNG development due to its abundant natural gas reserves, well-established infrastructure, and access to deepwater ports.
By investing in multiple projects across the region, ConocoPhillips not only secures additional supply but also strengthens its ability to serve both Atlantic and Pacific markets. The Gulf Coast’s geographical advantage allows LNG cargoes to be efficiently shipped to Europe through the Atlantic or to Asia via the Panama Canal.
Global LNG Market Dynamics
The timing of this deal reflects broader dynamics in the global LNG industry. Following the supply disruptions and geopolitical challenges of recent years—most notably the European energy crisis triggered by the Russia-Ukraine conflict—demand for reliable LNG supply has surged. Importing countries are seeking long-term contracts to secure energy availability and avoid exposure to volatile spot markets.
At the same time, Asia continues to be the largest demand center for LNG, led by China, Japan, South Korea, and emerging economies like India and Vietnam. With global LNG demand expected to rise steadily over the next two decades, producers like ConocoPhillips are moving to capture market share through long-term supply agreements.
Energy Security and Sustainability
For ConocoPhillips, the Rio Grande LNG agreement not only supports commercial growth but also contributes to broader goals around energy security and sustainability.
On one hand, natural gas and LNG are playing an increasingly critical role as transitional fuels in the global shift toward lower-carbon energy systems. LNG provides flexibility, reliability, and lower emissions compared to coal and oil, making it a preferred option for many countries seeking to reduce carbon intensity while maintaining stable energy supply.
On the other hand, projects like Rio Grande LNG that aim to incorporate carbon capture solutions align with the growing focus on decarbonizing the LNG value chain. ConocoPhillips’ involvement in such projects positions the company as a forward-looking partner for customers that prioritize cleaner energy.
