New Fortress Energy signs $4 billion LNG contract in Puerto Rico
In a social media post posted on Tuesday, Governor Jenniffer Gonzalez announced that Puerto Rico had negotiated a $4 Billion liquefied gas contract with New Fortress Energy.
The contract, which was signed after the talks on a larger contract in July broke down, has a term of seven years instead of 15 years, with an option to extend it for three more years. It also eliminates exclusivity clauses.
Gonzalez stated that the prices of LNG cargoes are more competitive and some premiums have been reduced.
This agreement will help Puerto Rico make the transition to cleaner energy, and reduce its dependence on fossil fuels.
The Financial Oversight and Management Board of Puerto Rico must now approve the agreement.
New Fortress Energy's shares grew 45% on Tuesday. In a separate press release, the company said that long-term LNG supplies for Puerto Rico could reach 75 trillion British Thermal Units per year. This would require a minimum take-or pay volume of 40 TBtu.
NFE plans to ship LNG from the floating facility in Altamira (Mexico) that started converting U.S. Natural Gas into LNG last year. The volumes will be sold at 115% the benchmark Henry Hub price plus $6.50 or $8.95 per million Btu.
Wes Edens, CEO of NFE said: "Puerto Ricans are paying too much today for electricity. This long-term deal will provide cheaper and cleaner fuel to existing power plants in years to come." Reporting by Nathan Crooks, Houston; editing by Marianna Pararaga and Ni Williams
(source: Reuters)