NFE shipped 12 Altamira LNG cargoes

NFE’s CFO Chris Guinta said during the company’s earnings call on Monday that the Fast LNG (FLNG) project is performing above nameplate capacity of 1.4 mtpa.

“Since achieving first gas in late July, we’ve successfully navigated several planned outages taking advantage of these windows to implement key process optimizations,” he said.

He said these “proactive” measures have allowed NFE to maximize uptime, enhance production efficiency, and ensure the asset is operating at “optimal conditions.”

“Notably, our highest production milestone was achieved in January when we reached approximately 120 percent of nameplate capacity. To date, we’ve shipped 12 cargoes totaling approximately 24 TBtu,” Guinta said.

“In parallel, we’ve taken significant steps to lower other operating costs including improving procurement strategies, renegotiating service contracts, and consolidating third-party vendor support,” Guinta said.

“Due to the asset’s exceptional performance and its ability to consistently produce, we officially placed the asset into service as of December 31, 2024. This milestone marks a significant step in the lifecycle of FLNG1 and positioned us for continued success in the year ahead,” he said.

Three rigs

In January, NFE’s investor update showed that its FLNG 1 had been steadily producing at 1.67 mtpa (440 cbm per hour) or 120 percent of its nameplate capacity.

The company said at the time that the uni shipped nine cargoes since launch last year.

NFE’s proprietary Fast LNG design pairs the latest advancements in modular liquefaction technology with jack up rigs or similar offshore infrastructure to enable a faster deployment schedule than traditional liquefaction facilities.

The company sent its liquefaction rig Pioneer II on September 26, 2023, to Altamira to start serving the FLNG project.

Prior to this, NFE’s utilities and accommodation rig, Pioneer III, arrived off Altamira, as well as the gas treatment rig.

The FLNG project consists of three rigs, Pioneer I, II, and III.

Besides the three rigs, the 160,000-cbm Penguin FSU serves the project as a floating storage unit.

Altamira LNG cargoes

In August last year, NFE loaded the first Altamira LNG cargo and this partial shipment was delivered to NFE’s La Paz, Mexico terminal.

The company shipped the first full LNG cargo from its first FLNG project off Mexico’s Altamira to Europe.

This shipment onboard the 138,000-cbm Energos Princess was delivered to the Dutch Gate LNG terminal in the port of Rotterdam.

Also, the third shipment was delivered to NFE’s operation in Puerto Rico, where NFE’s San Juan LNG import terminal is located and supplies a power plant and other customers.

NFE said its FLNG 1 is the only liquefier in the Gulf Coast that is permitted to export LNG to Puerto Rico.

The company just secured a one-year extension of its 80 TBtu islandwide gas supply contract with the Puerto Rico Electric Power Authority.

In January this year, NFE also signed a long-term deal with Energiza to supply natural gas to the latter’s 478 MW combined-cycle power plant being developed in San Juan, Puerto Rico.

The power plant is located adjacent to NFE’s existing San Juan LNG import terminal, which was commissioned in April 2020.

Excess supply

NFE’s chief Wes Edens said during the call that “FLNG entering service was a big catalyst for us.”

“And as a result, we have excess supply versus our current base demand,” he said.

“The significant incremental demand that we see in our core markets will definitely come over the next couple of years, but this surplus then leads to the next question. Do we wait and sell excess cargos over time until demand comes online or do we hedge and sell today to capture excess spread?”

“I think in particular with the geopolitical time that we live in, in particular the prospects for some kind of a resolution in the Ukraine, Russian war, we think that that alone would have a profound impact on the market,” he said.

“And so the answer of what we did in our judgment was to derisk, sell a portion of it, keep significant upside if the market stays elevated or goes higher. But if the market falls, we’re insulated, puts cash on balance sheet, conservative approach by us that we felt was struck the right balance,” he said.

“It’s good for our earnings. It’s good for our cash flow. It was the right decision to make. We still retain a lot of optionality. So a very, very good result with our FLNG volumes,” Edens said.

Second FLNG

In addition to the first FLNG project, NFE closed in July last year its previously announced $700 million loan for its second FLNG unit which it aims to install onshore in Altamira.

NFE’s FLNG2 is being built using modular design at the Kiewit shipyard.

The company previously signed a letter of intent with Mexico’s CFE to install FLNG units 2 and 3 onshore at the existing Altamira terminal.

The firm said that there is sufficient land for up to two 1.4 mtpa units, while the Altamira facility features two LNG tanks and a jetty.

“We currently expect onshore construction to commence this summer and are working closely with CFE on that process and provide additional updates as permits are received,” Guinta said.

“Over the last eighteen months, we’ve spent about $625 million with the bulk of that being on procurement in the modules. The remaining $480 million to spend is back end loaded with about $160 million expected to be spent in 2025 and the remainder to be spent in 2026 or 2027,” he said.

“Given that the modules that we built for FLNG1 are the exact same for FLNG2, we were able to shift risk to the construction contractor and get price and schedule certainty,” he said.

“As a result of and as of February 1, 2025, we were over 50 percent complete on the modules and the majority of the large pieces of kit are either already at the queue at the yard or ready to be shipped when needed,” he said.

The company expects mechanical completion of this unit in the fourth quarter of 2026, and commissioning and start-up in the first half of 2027.