Energy giant ConocoPhillips inks 20-year LNG deal that could expand Rio Grande LNG project in Brownsville

ConocoPhillips, a Houston-based energy giant and one of the world’s largest oil and gas producers, has signed a long-term deal to buy liquefied natural gas from the Rio Grande LNG export terminal planned at the Port of Brownsville — a commitment that would link South Texas directly to global energy markets once construction on the project’s next phase moves forward.

Deal tied to expansion plans

Under the 20-year agreement, ConocoPhillips would buy about 1 million tonnes of liquefied natural gas each year — roughly enough to power more than 1.4 million U.S. homes annually — once the project’s developer, NextDecade Corp., gives the green light to build Train 5, a proposed production unit that would expand the facility’s capacity beyond the first three trains already under construction.

That authorization, known as a final investment decision or FID, is made by NextDecade’s board of directors and determines when construction can begin. Each “train” at the site functions like a production line that cools natural gas into liquid form so it can be shipped overseas.

Federal approvals already in place

Federal regulators have already cleared the project. 

The Federal Energy Regulatory Commission (FERC) approved the full six-train Rio Grande LNG terminal in 2019 and reaffirmed that approval in 2023 after a supplemental environmental review, following court challenges over air-quality and habitat impacts. 

The U.S. Department of Energy (DOE) has also granted export authorization to non-free-trade-agreement countries, meaning construction on future phases can proceed once NextDecade’s board commits financing through its FID.

LNG — or liquefied natural gas — is natural gas chilled to roughly -260 degrees Fahrenheit until it becomes liquid, allowing it to be stored and shipped by sea to countries that rely on imported fuel.

As global demand rises, particularly in Europe and Asia, companies like ConocoPhillips are locking in long-term supply contracts with Texas-based exporters.

ConocoPhillips also plans to apply its OCP CryoSep technology at the site to remove heavy hydrocarbons during liquefaction, improving efficiency and fuel quality. 

The company already has a separate agreement to purchase 5 million tonnes per year from Port Arthur LNG Phase 1, a project under development in Port Arthur, Texas, by Sempra Infrastructure. That amount is five times larger than the Brownsville commitment — enough LNG to supply the equivalent of about 7 million U.S. homes annually — highlighting the company’s broader strategy to expand LNG operations across the Gulf Coast.

Brownsville’s growing role in global energy trade

For Brownsville, the deal underscores the city’s emergence as a hub for energy exports and industrial growth. 

Rio Grande LNG is among more than $20 billion in infrastructure projects underway or planned along the Brownsville Ship Channel — investments that include shipbuilding, steel imports, and fuel-storage facilities.

The Rio Grande Valley Business Journal previously reported on the $50.6 million sale of one of the Gulf’s largest shipyards to a Houston energy company and the recent layoffs at Seatrium AmFELS, both signs of how Brownsville’s industrial base is being reshaped by the energy sector.

For the Rio Grande Valley, ConocoPhillips’ participation signals confidence that Brownsville is positioned to play a central role in the next wave of Texas energy exports, connecting natural gas to markets around the world.