New Fortress and Mexico's state-owned power utility CFE are building a $1.3 billion hub in Altamira in the Gulf of Mexico to convert U.S. and Mexican gas into liquefied natural gas (LNG) for export.
New Fortress expects to complete and install two remaining floating LNG rigs this month, introduce gas in September and sell its first cargo in October. The facility will produce up to 1.4 million metric tons of LNG per year when fully operational.
"Each of the rigs have achieved mechanical completion, and we're in the process of commissioning various systems while the remaining rigs are still in the queue at shipyard," Chief Financial Officer Christopher Guinta said in an earnings call.
Two additional floating LNG plants for Altamira are under construction with operations startup planned for the first quarter of 2025.
"This (project) will ensure that there is no shortage of gas in Mexico, but also that we can export surpluses from Mexico and Texas," Mexico's President Andres Manuel Lopez Obrador said on Tuesday.
Altamira's plants will be fed through marine pipelines from Texas and state oil company Pemex's system, he added.
A total of nine onshore and floating LNG production facilities are planned in Mexico, both on the Gulf and Pacific coasts, which will mostly process U.S. gas. Lopez Obrador said some of the LNG to be exported from the Gulf will go to Germany.
New Fortress also is finalizing an agreement to sell its La Paz power plant in Mexico to CFE for some $180 million in a transaction to be completed in the first quarter of 2024.
EXPANSION
In Puerto Rico, a New Fortress subsidiary is since July managing power utility PREPA's thermal power generation system of 4,693 megawatts under a 10-year contract, expanding its presence in the Caribbean.
In Brazil, two LNG terminals, Barcarena and Santa Catarina, are expected to start operations between December 2023 and January 2024, bringing online a combined 6 million metric tons per year of LNG regasification capacity.
The firm is accelerating commercial activity, expecting to sign up supply contracts in the next few months, it said.
"We are at an inflection point as $3.2 billion of infrastructure come online in the next 90 days," New Fortress said at its earnings presentation. Capital expenditures for 2024 are expected to decline to $250 million as several projects are completed.
The firm announced net income of $120 million in the second quarter and $272 million in the first half of 2023.
