LNG

New Fortress Energy, the US integrated LNG and power company that owns, operates or provides natural gas to 30 facilities in five countries, reported a rise of over 20 percent in revenues and progress on key projects, including the Mexican floating production plant.

Brazil is seeking more natural gas to meet rising gas-fired power needs and has held talks with Argentina and Bolivia on reversing pipeline flows to transport Argentinian supplies from the Vaca Muerta shale-gas basin.

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.

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.

New Fortress Energy Inc., the US company with LNG-to-power projects in South America, the Caribbean and Sri Lanka in Asia, said completion work was being carried out on a new Nicaraguan import facility while its Mexican terminal in the state of Baja California Sur was now fully operational.

New Fortress Energy, the US operator and developer of liquefied natural gas projects in the Americas, has reached an agreement for LNG supply that will cover the needs of the existing gas-to-power businesses in Central America and the Caribbean through to the end of 2027, though was still seeking additional volumes for its Brazilian ventures.