New Fortress Energy Inc. has reached agreement on contract terms with the Third-Party Procurement Office and the Puerto Rico Public-Private Partnerships Authority for the long-term supply of liquefied natural gas to Puerto Rico, according to the company's release.
The contract is under review by the Financial Oversight and Management Board of Puerto Rico.
The gas supply agreement will provide LNG to Puerto Rico’s power system for seven years, replacing higher-emission liquid fuels and reducing costs for ratepayers.
According to Chairman and CEO Wes Edens, “First, it establishes security of supply in San Juan for the next 7 years for power plants currently running on LNG; Second, it provides for incremental LNG volumes to be delivered, allowing for the conversion of additional gas ready plants currently burning diesel, resulting in hundreds of millions of dollars in energy savings for Puerto Ricans.”
The agreement allows for up to 75 TBtu of natural gas annually, with minimum take-or-pay volumes of 40 TBtu, potentially increasing to 50 TBtu. Pricing is set at 115 percent of Henry Hub plus $7.95/MMBtu, except for units San Juan 5 & 6, which will receive gas at 115 percent of Henry Hub plus $6.50/MMBtu.
Supply will come from NFE’s 1.4 MTPA Fast LNG facility offshore Altamira, Mexico, which began operations in Q4 2024 and is producing above nameplate capacity.
CFO Chris Guinta said, “Matching our LNG production with long term offtake has always been our goal. This locks in sustainable long-term margins for NFE and provides a foundation of financial stability for our company.”
Edens added that the contract complements a 25-year supply contract with Energiza and supports the development of a new 550 MW power plant.