New Fortress Energy and Puerto Rico scaled down a proposed LNG supply deal from $20 billion to $4 billion to meet the standards of a government watchdog group, the parties announced Sept. 16.
Puerto Rico Gov. Jennifer Gonzalez said in a Facebook post that she had submitted the proposal to the submitted to the Financial Oversight and Management Board (FOMB) for Puerto Rico.
“Today, we announce that after an exhaustive negotiation process, we substantially modified the agreement with NFE,” Gonzalez said. “This new version provides significant savings to the treasury and greater protections for the people. That’s what this is about: achieving the best deal for Puerto Rico.”
In July, the FOMB rejected a $20 billion contract for New Fortress to supply LNG to the first new power plant built on the island in 20 years.
The $20 billion proposal would have supplied the island territory with LNG for 15 years. The new proposal scales the plan back to seven years, with an option for three additional years, and $4 billion.
“We have had discussions on long term fuel supply since April with the Government of Puerto Rico and are pleased to have reached an agreement,” said Wes Edens, CEO of New Fortress, in a press release.
The LNG is expected to be supplied by NFE’s 1.4-million tonnes per annum (mtpa) floating LNG facility located offshore Altamira, Mexico. The facility achieved commercial operations in 2024 and is currently producing LNG at a rate above nameplate capacity, according to New Fortress.
The contracted volumes were reduced from the original agreement to 75 MMBtu from 100 MMBtu. Puerto Rico was given flexibility to diversify its natural gas suppliers at the San Juan terminal if NFE is unable to supply fuel.
The agreement is now pending approval by FOMB. The entity was created by Congress after the island’s government filed for bankruptcy in 2016.
The board rejected the original agreement citing concerns about cost, duration and long-term fuel dependency.