SEATTLE (Oil Monster): A seven-year contract for the supply of liquefied natural gas (LNG) to Puerto Rico was signed by New Fortress Energy Inc. (NFE). The Puerto Rico Financial Oversight Management Board has not yet approved the long-term deal.
The deal strengthens NFE's position in Puerto Rico's continuous power infrastructure modernization initiatives. It is anticipated that the action will change the island's energy environment. It will also contribute to the delivery of notable economic and environmental advantages. Puerto Rico hopes to reduce its dependency on more costly and environmentally harmful fuels like diesel by guaranteeing a supply of natural gas.
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According to the agreement, take-or-pay volumes must be at least 40 TBtu annually, with the possibility of reaching 50 TBtu. The Henry Hub benchmark will be used to determine the price. Also, the gas for the contract will be sourced from NFE’s Fast LNG facility located offshore Mexico. The facility, which commenced production late last year, is reportedly operating above its nameplate capacity currently.
It should be mentioned that NFE and Puerto Rico have a long history together. NFE has an ongoing 25-year supply contract with Genera PR- the company that operates the island’s power plants.
