LNG

New Fortress Energy Inc., the expanding LNG terminals, production, shipping and power assets owner, has closed the sale of a power plant in northeast Brazil and said the proceeds would go to LNG projects.

NFE said that along with its joint venture partner Ebrasil Energia the companies had concluded the sell off of the Centrais Elétricas de Sergipe (CELSE) Power Plant to Brazilian power company Eneva S.A.

Under the deal, NFE explained that Eneva had acquired 100 percent of the shares of Centrais Elétricas de Sergipe Participações SA, the NFE-Ebrasil joint venture that had held the equity interests of the CELSE Power Plant, and 100 percent of the shares of Centrais Elétricas Barra dos Coqueiros SA which owns 1.7 gigawatts of expansion rights adjacent to the CELSE Power Plant.

“The closing of this transaction further deleverages and simplifies our capital structure and marks another significant step toward our goal of an investment-grade credit rating,” said Wes Edens, Chairman and Chief Executive of NFE.

Redeploying capital

“We are pleased to redeploy these proceeds toward the capital needs of our ‘Fast LNG’ program and downstream LNG projects worldwide, internally funding our strategic growth initiatives to serve our customers’ needs amid a structurally short global LNG market,” stated Edens.

A portion of the proceeds from the sale was used to pay off the entire outstanding balance of the fully retire Standby Guarantee and Credit Facility Agreement with GE Capital EFS Financing Inc., while Eneva will assume the outstanding debt obligations of CELSE.

Energos Infrastructure, a joint venture established between New York-based asset management firm Apollo and NFE, will continue to operate the “Golar Nanook”, a floating storage and regasification unit (FSRU) that remains chartered to CELSE for use at the CELSE Power Plant for more than 20 years.

NFE’s latest priority activities are related to its “Fast LNG” program for LNG production in the Gulf of Mexico and at other locations.

The US company will produce the LNG using its “Fast LNG” platforms, some of which will be built at the new Kiewit Offshore Services shipyard near Corpus Christi in Texas.

NFE’s “Fast LNG” pairs modular, midsize liquefaction technology with jack-up rigs or similar floating infrastructure to enable a much lower cost and faster deployment schedule than floating liquefaction vessels.

Investor day

The US company is additionally involved in other FLNG ventures, including one offshore Louisiana and another offshore the Republic of Congo in West Africa.

NFE is planning an investor day at the Kiewit yard to explain its US Gulf Coast FLNG ambitions.

The company has chosen Kansas City-based LNG construction company Kiewit as its partner for the event planned for 10:00 am Central Time on November 22.

CEO Edens has said he expected to achieve mechanical completion of the first FLNG unit in March 2023 and deploy it by mid-year, with additional units to follow soon afterwards.

Delfin Midstream, the US liquefied natural gas developer, and US oil and gas exploration and production company, Devon Energy, have entered into an LNG export partnership.

The companies agreed to a strategic investment deal and a Heads of Agreement that would give Devon up to 2 million tonnes per annum of liquefaction capacity.

The Delfin floating LNG project is based on the deployment of vessel-borne liquefaction facilities with other moored production and storage vessels and recently asked the Federal Energy Regulatory Commission to extend the deadline for the onshore completions of the venture to the 28th of September 2023.

The Delfin developers have already been awarded a deepwater port licence by the US Maritime Administration (MARAD) and the project has been approved by the US Coast Guard.

Delfin is additionally seeking to construct, operate and maintain certain onshore metering, compression, and piping facilities located onshore in Cameron Parish in Louisiana.

Offshore Louisiana

Delfin, based in Houston, Texas, said the HOA provided the framework for finalizing a definitive long-term tolling agreement representing 1 MTPA of liquefaction capacity in Delfin’s first FLNG vessel offshore Louisiana, with the ability to add an additional 1 MTPA in Delfin’s first or a future FLNG unit.

In addition to providing Devon with up to 2 MTPA of total liquefaction on a long-term basis, the HOA also provides opportunities for additional future equity investments in Delfin.

“We are delighted to execute this agreement with Devon, representing a truly strategic partnership between a US producer and a liquefaction provider,” said Dudley Poston, Delfin Chief Executive.

“We believe our unique liquefaction solution provides significant structural flexibility that allows producers to maximize the value of their natural gas, while providing a much-needed source of additional supply to the world LNG marketplace,” added Poston.

Devon is a leading independent E&P company in the US with a premier multi-basin portfolio and a world-class acreage position in the Delaware Basin of West Texas and southern New Mexico.

Investment

“Our decision to invest in Delfin was the result of a thorough process intended to create additional pricing diversification for our natural gas portfolio and deliver a sustainable and capital efficient return for our shareholders,” said Rick Muncrief, Devon’s President and CEO.

“Devon has a strong track record of finding best-in-class midstream and downstream solutions for our production and we are excited to partner with Delfin to meet the need for safe, clean and reliable energy,” stated Muncrief.

Delfin has additionally signed a binding SPA with global commodities company Vitol and an HOA on supply with UK utility Centrica.

As a modular project requiring only 2 MTPA to 2.5 MTPA of long-term contracts to begin construction, and with all necessary permits in hand, Delfin is on schedule to make its FID on its first FLNG vessel by the end of 2022.

In the Delfin-Devon deal discussions, Latham & Watkins LLP served as legal advisor to Delfin and Kirkland & Ellis LLP was legal advisor to Devon.

Delfin Midstream, the US LNG export project shareholder offshore Louisiana, has completed the engineering and design phase of the venture for the first of its floating production vessels with South Korean shipyard Samsung Heavy Industries and US liquefaction technology company Black & Veatch.