LNG

New Fortress Energy, the New York-based developer of liquefied natural gas import and export projects, has entered into a definitive agreement to charter the “Energos Winter”, a floating storage and regasification unit (FSRU), from Brazilian state company Petróleo Brasileiro (Petrobras) and with the FSRU being deployed in the south of the country.

NFE said that the “Energos Winter” charter from Petrobras would start in December and the FSRU would “immediately” be deployed to the Terminal Gas Sul (TGS), NFE’s newest LNG import facility in the state of Santa Catarina.

The US company said that the TGS terminal project would thus begin commercial operations ahead of schedule in January 2024.

NFE is currently completing two terminals projects in Brazil, one at Santa Catarina and a second at Barcarena in the state of Pará in the far northeast of Brazil.

Growth opportunity

“We are extremely pleased to reach this agreement with Petrobras and begin operations at the TGS terminal in Santa Catarina, Brazil ahead of schedule in January 2024,” said NFE Managing Director Andrew Dete.

“The TGS terminal is a unique, high-growth opportunity for NFE, as connection to the pipeline system in south Brazil offers a diverse and near-term set of opportunities across power and gas supply,” Dete explained.

The “Energos Winter” will be sub-chartered by NFE through the remaining term of the Petrobras charter with Energos Infrastructure and then direct-chartered by NFE on a long-term basis with Energos.

“This will enable NFE to commence commercial operations at TGS in January 2024 and continue uninterrupted service on a long-term basis,” said NFE.

Energos Infrastructure, the owner of the “Energos Winter” FSRU, is owned 80 percent by funds managed by New York equity firm Apollo and 20 percent owned by NFE.

LNG production

NFE is on course to start LNG production and export operations by early 2024 at Mexico’s first production facility with capacity of 1.4 million tonnes per annum.

NFE’s “Fast LNG” project comprises modular, midsize liquefaction technology with jack-up rigs to enable lower costs

The US company and Mexico's state-owned power utility, the Comisión Federal de Electricidad (CFE), have set up the LNG hub in Altamira in the Gulf of Mexico to convert Mexican natural gas into LNG for export.

Each of NFE’s three parts of the first “Fast LNG” project were completed at the Kiewit Offshore Services yard in Ingleside in Texas.

The company said that the first “FLNG 1” liquefaction operating facility is being deployed in Mexican waters at a cost of just $1.3 billion, far below the cost of other proposed projects.

New Fortress Energy, the New York-based developer of liquefied natural gas import and export projects, could begin production as early as October 2023 from a floating FLNG plant offshore the Mexican port of Altamira in the Gulf of Mexico.

NFE is on course to start LNG production and export operations in the weeks ahead, the first ever from Mexico, at a facility with capacity of 1.4 million tonnes per annum.

NFE’s “Fast LNG” pairs modular, midsize liquefaction technology with jack-up rigs to enable lower-cost and faster deployment schedules.

The US company and Mexico's state-owned power utility, the Comisión Federal de Electricidad (CFE), have set up the LNG hub in Altamira in the GoM to convert Mexican natural gas into LNG for export.

Installations

The US company expects to complete and install the two remaining parts of the FLNG project this month and to immediately introduce gas and with a first cargo sold in October, according to a company presentation.

Each of NFE’s three parts of the first “Fast LNG” project have been completed at the Kiewit Offshore Services yard in Ingleside in Texas.

The company said that the first “FLNG 1” liquefaction operating facility is being deployed in Mexican waters at a cost of just $1.3 billion, far below the cost of other proposed projects.

NFE has yet to formally confirm when exactly the Altamira FLNG production plant will come on stream.

The US firm received an export permit in June 2023 for the Altamira ‘Fast LNG’ facility from Mexico’s Ministry of Energy.

Under the permit, NFE is authorised to export up to 7.8 million tonnes of LNG through April 2028, providing ample capacity to support the operations of the planned 1.4 MTPA facility through the permitted period. 

Final piece of puzzle

“This permit is the final piece to the puzzle for launching our first ‘Fast LNG’ in Altamira,” Wes Edens, NFE Chairman and Chief Executive has said.

NFE is also completing two other LNG projects in the months ahead relating to LNG imports in the South American nation of Brazil.

The Barcarena LNG import terminal in the state of Pará is due for completion in December 2023 at a cost of $700M and in January 2024 a second Brazilian import terminal will open in Santa Catarina state in the south of Brazil.

Each of the Brazilian terminals will have import capacity of 3 MTPA to support local power projects.

NFE has said that the “Fast LNG” project at Altamira as well as two Brazilian import terminals and a power venture in Puerto Rico are part of a revenue spend of  $3.2Bln on infrastructure that will soon be “revenue producing” operations for the company.

TC Energy, the North American natural gas and energy pipelines company constructing pipeline links from British Columbia's shale basin to LNG projects on the coast, reported a surge in net income of more than three-fold as projects progressed from Canada to Mexico.

Iberdrola, the Spanish utility company and former major liquefied natural player that sold most of its LNG portfolio to Pavilion Energy of Singapore in 2019, said it had agreed to sell 13 mostly gas-fired power plants in Mexico for $6 billion to the Mexican government.

The Mexican President Andrés Manuel López Obrador praised the deal with Iberdrola as a “new nationalization” of the electricity market in Mexico.

The Chairman of Iberdrola, Ignacio Galán, and Mexico’s President López Obrador, announced the deal after a meeting.

Iberdrola said the sales agreement was signed with an entity called Mexico Infrastructure Partners and involved 8,400 megawatts of capacity from 12 gas-fired plants and one 103 MW wind asset called La Venta III.

Iberdrola Chairman Galán said the Spanish utility was still committed to advancing the development of renewable energy in Mexico.

Strategy

“Iberdrola confirms its commitment to Mexico by reaffirming its leadership as the leading private generator of renewable energy with the backing of the Federal Government to continue operating its assets under market conditions and drive the energy transition in the country,” Galán explained.

“In addition, Iberdrola Mexico will continue to serve its existing customers and both parties will work together to try to resolve the various disputes that have arisen in the country in recent years,” the Iberdrola Chairman added.

Leftist President López Obrador had previously compared the attitudes of Iberdrola and several other companies to those of conquerors, a reference to the Spanish Conquistadors who had invaded South America and Mexico in the 16th Century.

Iberdrola had been a major LNG market participant until the 2019 transaction with Pavilion Energy when Iberdrola’s LNG assets were sold as part of the Spanish utility’s €3.5Bln ($3.8Bln) “non-strategic asset rotation” plan.

Mexico itself is a major importer of US pipeline natural gas as well as LNG and also has plans to be an LNG exporter.

New policy

The Mexican President said that the sales agreements for the 13 power plants allowed progress to be made on the implementation of Mexico's “new energy policy” for the future.

The transaction with Iberdrola gives the Mexico’s state-owned power company, Comisión Federal de Electricidad (CFE), or the Federal Electricity Commission, majority control over the electricity market.

“This means we're rescuing the Comisión Federal de Electricidad and this is a new nationalization of our electric industry,” stated López Obrador.

López Obrador added that the acquisition would take CFE's power generation holdings to almost 56 percent of Mexico's total, up from about 40 percent.

A statement said that the deal was expected to be completed within the next five months.