Excelerate buys NFE’s Jamaica business for $1.05 billion

The transaction includes the sale of NFE’s LNG import terminal in Montego Bay, offshore floating storage and regasification terminal in Old Harbour, and 150 MW combined heat and power plant in Clarendon, along with the associated infrastructure.

Excelerate said in a statement that it expects to assume all material contracts currently in place.

According to Excelerate, the cash purchase price of $1.055 billion represents a multiple of about 9x the Jamaica business’ 2025E adjusted Ebitda.

Excelerate intends to fund the transaction using a combination of permanent financing and cash-on-hand.

The company has backstopped the financing with an $850 million fully committed bridge facility.

Excelerate said the transaction was unanimously approved by the Excelerate and NFE boards of directors and is expected to close as early as the second quarter of 2025, subject to regulatory approvals and the satisfaction of other customary closing conditions.

“This transaction represents an important milestone in the execution of Excelerate’s downstream growth strategy. It will expand and diversify our platform, while positioning Excelerate as the key provider of essential LNG import infrastructure in a desirable and growing Atlantic basin natural gas market,” said Steven Kobos, president and CEO of Excelerate.

Moreover, Kobos said these assets complement Excelerate’s existing operational expertise and its long-term LNG supply agreements, while offering the potential for future growth opportunities as natural gas becomes an increasingly essential part of Jamaica’s energy mix.

“Importantly, this transaction also enhances our financial profile, providing predictable, long-term cash flows at stable margins with a weighted average remaining contract duration of approximately 21 years including contract extensions. We are confident the addition of this Jamaica platform will deliver significant value for our shareholders,” Kobos said.

NFE boosting financial flexibility

Last year, NFE said it was seeking strategic partners for one or more of its core businesses to boost the company’s liquidity.

The company was working to identify strategic partners for one or more of its primary businesses, including projects in Brazil, Puerto Rico, Jamaica, Mexico, Nicaragua, FLNG 1, and Klondike.

Announcing the Jamaica sale in a separate statement, NFE said that proceeds from the transaction will be used to reduce NFE’s corporate debt and for general corporate purposes.

This transaction marks a “key step” in NFE’s strategy to optimize its asset portfolio and enhance financial flexibility, it said.

Excelerate’s expansion

Excelerate operates ten FSRUs, one of the world’s largest fleets of such vessels, and these units are located worldwide.

Some FSRUs are located in Finland, Brazil, Dubai, Pakistan, while one FSRU will also start serving the second FSRU-based LNG import terminal in Germany’s Wilhelmshaven later this year.

In addition to these 10 FSRUs, Excelerate also ordered one 174,000-cbm FSRU at South Korea’s HD Hyundai Heavy Industries in 2022.

The firm also aims to buy an LNG carrier this year as part of its expansion plans.

Exclerate said the NFE deal adds downstream and “last-mile” infrastructure to complement and diversify its existing portfolio.

Benefits of the deal also include infrastructure-like contract profile with stable margins, attractive long-term offtake tenor, and robust recontracting opportunities:

Excelerrate said 86 percent of contracted revenue was take-or-pay as of December 31, 2024, with a weighted average remaining tenor of approximately 13 years, representing approximately $2.9 billion of cumulative take-or-pay direct margin 2025 through 2039.

Long-term, Excelerate said it plans to use its own Venture Global LNG supply, which is “well-matched with customer offtake commitments, minimizing commodity risk.”

Moreover, Exclerate said the acquisition offers opportunities to expand in Jamaica, leveraging existing infrastructure.

These includes LNG bunkering, benefitting from the trend of container and cruise vessels increasingly utilizing the Caribbean as a bunkering destination

It also includes the expansion of the Clarendon CHP plant and the ability to continue to grow LNG fuel supply for Jamaica’s industrial base, benefitting from the anticipated continued shift away from oil as natural gas becomes an increasingly essential part of Jamaica’s energy mix.