New Fortress Energy Inc. (NASDAQ: NFE) (“NFE”) today announced that it has entered into an agreement with Comisión Federal de Electricidad (“CFE”) as part of a growing strategic alliance supported by His Excellency Andrés Manuel López Obrador, the President of Mexico, and by Manuel Bartlett, the CEO of CFE.
The agreement involves (i) expanding and extending NFE’s supply of natural gas to multiple CFE power generation facilities in Baja California Sur, (ii) selling NFE’s 135 MW La Paz power plant to CFE, and (iii) creating a new LNG hub off the coast of Altamira, Tamaulipas, with CFE supplying the requisite feedgas to two NFE FLNG units using CFE’s existing pipeline capacity.
“We are pleased to expand our strategic alliance with CFE, which will enhance clean energy security for Mexico and enable the construction of a new LNG hub off the coast of Altamira,” said Wes Edens, Chairman and CEO of NFE. “We appreciate the continued support of President López Obrador and value the opportunity to demonstrate our commitment to producing cleaner, cheaper energy for Mexico and the world.”
Baja California Sur
In July 2021, NFE commenced commercial operations of an LNG regasification terminal in the port of Pichilingue, La Paz, Baja California Sur. The terminal, which features NFE’s proprietary ISOFlex system, is optimally positioned to supply natural gas to CFE’s generation facilities in the otherwise resource-stranded region, which include CTG La Paz and CTG Baja California Sur.
Pursuant to the agreement announced today, CFE and NFE will extend the term of NFE’s gas supply agreement to CFE’s power generation facilities in the region and increase the volume of delivered natural gas under mutually agreeable terms. Additionally, NFE has agreed to sell its own 135 MW power plant in La Paz to CFE. The addition of this power plant to CFE’s generation fleet is expected to enhance system reliability, reduce power costs, and complement steps CFE is taking to expand the use of renewable energy resources and lower emissions in the region.
NFE and CFE plan to collaborate on the creation of a new LNG hub off the coast of Altamira, Tamaulipas. Pursuant to the agreement announced today, NFE will deploy multiple FLNG units of 1.4 MTPA each that utilize CFE’s existing firm pipeline transportation capacity to deliver feedgas volumes to NFE. As part of the agreement announced today, CFE would share in the production and marketing of a portion of the LNG volumes from the new Altamira offshore LNG hub.
The transactions described in this press release are subject to customary terms and conditions and finalization of related agreements.