LNG

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.

New Fortress Energy, the US LNG production and import projects developer, said that it finalized agreements with Mexico’s Federal Electricity Commission (CFE), including plans for an offshore production hub near the Gulf of Mexico import terminal at Altamira.

NFE said that its Mexican accords were fully supported by Mexican President Andrés Manuel López Obrador and by Manuel Bartlett, the Chief Executive of the CFE.

The New York-based company noted that the final versions of the agreements would be signed at a ceremony on November 3 in Mexico City.

The NFE-Mexican accords cover the expansion and extensions of NFE’s supply of natural gas to multiple CFE power generation facilities in the northwest Mexican state of Baja California Sur.

IT additionally includes the selling of NFE’s 135-megawats La Paz power plant to CFE as well as the new FLNG hub off the coast of Altamira in the state of Tamaulipas.

For the LNG production hub, NFE said that the Mexican side through the CFE would be supplying the requisite feed-gas to multiple NFE FLNG units using CFE’s existing and under-utilized pipeline capacity.

Strategic alliance

“We are pleased to complete these agreements and expand our strategic alliance with CFE, which we expect to result in the delivery of our first FLNG unit by mid-2023 and enable the construction of a new LNG hub off the coast of Altamira,” explained Wes Edens, Chairman and CEO of NFE.

“I look forward to seeing President López Obrador next week, appreciate his continued support, and value the opportunity to demonstrate our commitment to producing cleaner, cheaper and more reliable energy for Mexico and the world,” declared Edens.

NFE commenced commercial operations in July 2021 at an LNG regasification terminal in the port of Pichilingue in Baja California Sur.

The US company noted that the terminal, which features NFE’s proprietary “ISOFlex system”, is positioned to supply natural gas to CFE’s generation facilities in the otherwise resource-stranded region.

For the Altamira operations in the Gulf of Mexico, NFE and the CFE are fully collaborating on the creation of the new FLNG hub.

Pursuant to the now finalized agreements, NFE will deploy multiple FLNG units of 1.4 million cubic metres capacity each that utilize CFE’s existing firm pipeline transportation capacity on Sur de Texas-Tuxpan Pipeline to deliver feed-gas volumes to NFE.

The Sur de Texas-Tuxpan Pipeline is operated by Canadian company TC Energy.

NFE’s first FLNG unit, which is under construction at the Kiewit Offshore Services shipyard near Corpus Christi in Texas, is currently expected to achieve mechanical completion in March 2023.

“As part of the agreements, CFE would share in the production and marketing of a portion of the LNG volumes from the new Altamira offshore FLNG hub,” said NFE.

Tokyo Gas and JERA Co. Inc., the leading Japanese utilities and LNG importers, have sold their combined 50 percent stake in a Mexican-based company operating five gas-fired power plants, including one close to the Gulf Of Mexico LNG import terminal at Altamira.

The Mexican company MT Falcon Holdings owns five natural gas combined-cycle power plants (CCPPs) in northeast Mexico and Tokyo Gas and JERA have sold their respective 30 percent and 20 percent stakes.

Each power plant has had long-term power purchasing agreement with Mexico’s state-owned Federal Electricity Commission.

Both Tokyo Gas and JERA have entered into sale and purchase agreements with Actis GP LLP, a London-based private equity firm with investments in global energy infrastructure.

The sales are expected to be completed by the end of March 2022 and are subject to certain approvals from Mexican government authorities.

“Tokyo Gas will enhance business expansion also in the global business such as renewable energy, gas and power supply, LNG infrastructure development, and contribute to the society through corporate growth with the experience and knowledge acquired from MT Falcon,” explained the Tokyo utility, which is aiming for more Asian investments.

The five MT Falcon plants have total generating capacity of 2,233 megawatts of power.

The value of the transactions with Actis were not disclosed, though the Japanese utilities seemed pleased with their sell-offs.

The power plant near the Mexican LNG import terminal at Altamira is a facility with 495 MW of capacity.

Three of the other plants are at Rio Bravo and the fourth is at Saltillo.

JERA also indicated that it preferred its investment portfolio to show more growth in Asia than in the Americas.

“JERA will continue to renew its portfolio going forward, selling assets and reinvesting the proceeds as it optimizes its asset allocation for compatibility with a changing business environment,” said JERA.

The company is the largest Japanese LNG buyer with 35 million tonnes per annum of volumes and controls a fleet of 20 LNG carriers.

JERA is Japan’s biggest fossil-fuel generator being owned jointly by Tokyo Electric Power Co. and Chubu Electric, the two largest power companies.

The joint venture company currently operates and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals.

The Tokyo Gas LNG portfolio currently amounts to around 14 MTPA and the utility controls a fleet of 10 ships to deliver to its four import terminals, three around Tokyo Bay and one at Hitachi in Ibaraki Prefecture.

Mexico is seeking more long-term natural gas supplies from the US Gulf Coast in competition to expected rising demand for feed-gas from large-scale LNG liquefaction and export projects under development, with the Mexicans issuing a request for offers for long-term supplies of natural gas at a West Texas hub.

Mexico, a recipient of US pipeline natural gas and LNG cargoes from nations such as the US, Nigeria and Peru, plans to launch an online gas trading platform by mid-2018 at the latest.