LNG

New Fortress Energy, the US integrated LNG and power company that owns, operates or provides natural gas to 30 facilities in five countries has been awarded a new gas supply contract in Puerto Rico.

NFE said the Puerto Rico gas contract more than doubles the volumes of gas it currently provides to power plants in the US territory in the Caribbean.

The New York-based company additionally sold two operating power plants to the Puerto Rico Electric Power Authority (PREPA).

NFE explained that it sold the emergency power plants it constructed on behalf of the US Army Corps of Engineers in San Juan and Palo Seco in Puerto Rico to PREPA for $373 million in cash, subject to certain items and conditions.

Power security

“These plants were developed by the company in 2023 in rapid response to a competitive bid by the US Army Corps of Engineers to provide emergency power in order to stabilize the power grid in Puerto Rico,” explained NFE.

“They have become a cornerstone of Puerto Rico's energy portfolio, delivering critical baseload power to stabilize the grid in the aftermath of recent natural disasters, and as contemplated, their ownership has been transferred to PREPA,” NFE added.

Following a competitive bid process, NFE was awarded and has entered into a new island-wide gas supply contract with PREPA, ensuring continued gas supply to these power plants for up to four years.

“The expanded volumes under the contract will enable conversion of other plants on the island from diesel to gas, providing lower cost, cleaner energy to Puerto Rico,” NFE stated.

As a result of the early termination of the contracts that have governed the construction, operations and associated costs of the two power plants, NFE said that it expected to negotiate a mutually beneficial settlement of all outstanding obligations in the near future.

“We entered the Puerto Rico market in 2017 based on the island’s emergency need for natural gas and power,” said Wes Edens, Chairman and Chief Executive of NFE.

“The transactions mark a significant milestone in our continued commitment to Puerto Rico's energy security and cost reduction efforts while significantly increasing our business in the region,” Edens added.

LNG projects

In its most recently earnings, NFE reported net income for 2023 of $547.88M, an almost three-fold increase from the $194.48M achieved in 2022.

After the end of the financial year NFE noted that in February 2024 it completed the Brazilian Barcarena and Santa Catarina LNG import terminals and placed them into service.

In NFE’s “Fast LNG” operation whereby it produces LNG from feed gas, it placed into service its first unit offshore the Gulf of Mexico and is now expecting first LNG in March and the first cargo in April 2024.

Latin American and Caribbean nations imported more LNG during the first quarter and there was also a surge in cargo re-loads in Europe as well as quarterly and March exports from global liquefaction plants.

New Fortress Energy, the developer of LNG production, regasification and electricity projects and with a small shipping fleet, said its Genera subsidiary was selected by Puerto Rico to manage the US Caribbean territory’s power generation system.

New Fortress Energy, the US LNG production and import projects developer, reported a jump in revenues and a swing to profits in the third quarter while forecasting bumper earnings from floating LNG production projects.

The International Gas Union (IGU), a global voice of the pipeline natural gas and LNG industries with more than 150 members in over 80 countries, has published the latest annual edition of the IGU Wholesale Gas Price Survey.

The US Department of Energy published its latest LNG monthly export data with European nations such as France, Spain, the Netherlands and Italy being joined by Japan in the list of leading destinations while Sempra’s Cameron LNG plant in Louisiana shipped the most expensive cargoes for a second month.

Avenir LNG, the Norwegian-listed small-scale LNG project developer and vessel owner, has taken delivery of the “Avenir Achievement” as it expands its small-scale terminal and carrier business.

Global LNG trade increased by 6 percent to 385 million tonnes with economic activity picking up in several countries while supply constraints and rising demand caused significant volatility in prices as nations scrambled to secure LNG cargoes to meet gas demand for the past winter season.

Trading in the LNG sector was one of the issues covered by the 2022 edition of the “Global Gas Report” published by the International Gas Union on the occasion of the 28th IGU World Gas Conference in South Korea.

“Overall, LNG exports grew in 2021, with the US leading the way through its year-on-year increase of 23 million tonnes,” said the IGU in a report covering the past two years.

“This provided security of supply to some extent, especially in a tight market. US LNG recovered well from the cancellation of cargoes and reduced usage of liquefaction plants the previous year,” said the IGU report.

About 48 percent of US export volumes were delivered to Asia, driven by increasing demand in South Korea and China.

The IGU noted that Japan was the third-largest importer of US LNG in 2021, with the three countries accounting for over 36 percent of all US export volumes last year.

Brazil surge

LNG exports to Europe had also increased in March and April 2021, a year before the Ukraine events and after a cold winter had depleted the region’s natural gas in storage.

“Volumes decreased during the following months but increased again in the fourth quarter and peaked in December 2021, as Europe’s natural gas inventories remained low,” the IGU recalled.

US LNG exports to Brazil increased from 2.3MT in 2020 to 7MT in 2021 as an intense drought in the country limited hydro-electric power generation and led to more consumption of natural gas for power.

“LNG exports from Australia, Qatar and Russia remained stable from 2020 to 2021, while there was a decrease in volumes from Nigeria and from Trinidad & Tobago over the same period,” said the IGU report.

Pipeline exports

Pipeline natural gas export volumes also increased last year by 6 percent, mirroring the rebound of global economic activity.

“The US saw an 8 percent rise in pipeline exports to Mexico, while domestic consumption in the country remained low,” the report noted.

In the Asia Pacific region, net gas imports grew by 17 percent, with one-fifth of that incremental volume attributed to increased pipeline imports.

“This was particularly prominent in China, as import volumes rose due to weather-related factors and higher economic activity,” said the IGU.

“Russia’s pipeline export volumes increased by about 4 percent from 2020, with incremental volumes flowing to Germany, Italy and Turkey,” it added.

Europe’s pipeline imports rose by 0.5 percent in 2021, supported by an annual increase in volumes flowing from Algeria.

Russia’s pipeline deliveries to Europe declined further towards the end of the year, resulting in a tighter market and higher gas prices.

The IGU said that natural gas production levels in the Middle East increased, with Iran’s pipeline exports to Turkey and Israel’s pipeline exports to Egypt growing significantly.

Golar LNG Ltd said it sold about one third of the 18.6 million New Fortress Energy Inc. shares received upon completion of the sale of Hygo Energy Transition to NFE in April 2021.

The sale is expected to raise net proceeds of approximately $250 million which Golar said it would seek to deploy to floating LNG growth projects.

“Golar is excited about new FLNG growth prospects, including those being pursued by NFE and plans to remain a supportive shareholder for the foreseeable future,” stated Golar Chief Executive Karl Fredrik Staubo in regards to the sale.

Golar LNG reorganized its business following the sale of the Hygo Energy Transition stake and Golar LNG Partners to New York-based LNG-to-power firm NFE.

Golar finalized the sale in 2021 of its 50 percent stake in Hygo Energy Transition, formerly known as Golar Power, and its 32 percent interest in its US affiliate Golar LNG Partners, both to NFE.

Hygo Energy itself was a joint venture set up between Golar and US private equity firm Stonepeak Infrastructure Partners.

Golar LNG shares had plunged more than 30 percent, on 26th of September 2020, when Hygo Energy was caught up briefly in a Brazilian corruption investigation.

Previous crisis

Golar’s stock fell after news emerged of Hygo Energy Chief Executive Eduardo Antonello being involved in a probe into certain activities before he had joined Hygo Energy. Antonello later stepped down from Hygo Energy over the controversy.

The corporate crisis came at a time when Hygo Energy was expanding its LNG-for-power projects in northeast Brazil. The business was subsequently purchased by NFE, led by its high-profile CEO Wes Edens.

The Golar assets sales deals involved NFE taking over Golar’s US unit, Golar LNG Partners. and the Hygo Energy stake.

The transactions were valued at the time at more than $5 billion in cash and assets and turned NFE into the leading gas-to-power company in Brazil while providing LNG shipping assets and experience.

NFE already had projects in Jamaica and Puerto Rico and later started LNG import ventures in Mexico and Nicaragua.

New Fortress Energy Inc., the New York-based LNG-for-power project company, has signed two 20-year sale and purchase agreements with US company Venture Global, owner of the existing Calcasieu Pass LNG plant and developer of three other liquefaction and export projects in Louisiana.