New Fortress Energy (NFE) 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 LNG to Puerto Rico.
The contract is currently under review for approval by the Financial Oversight and Management Board of Puerto Rico.
NFE said the gas supply agreement (GSA) will provide a reliable and affordable supply of LNG to Puerto Rico’s power system for a term of seven years.
"This long-term arrangement will support Puerto Rico’s efforts to replace expensive, higher-emission liquid fuels with cleaner natural gas, delivering significant savings to Puerto Rican ratepayers in the process," NFE said in a press release.
Wes Edens, Chairman and CEO of NFE, said that the agreement will also provide 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."
Up to 75 TBtu of natural gas per year can be supplied through the GSA, with minimum annual take-or-pay volumes of 40 TBtu, increasing to up to 50 TBtu if certain conditions are met.
The volumes under the GSA are expected to be supplied by LNG produced from NFE’s 1.4MTPA Fast LNG facility located offshore Altamira, Mexico. NFE said the facility is currently producing LNG at a rate above name plate capacity consistently.