NFE in Brazilian LNG-to-power move

US LNG player New Fortress Energy said it had signed a definitive deal with Ceiba Energy to acquire a 1.6 GW capacity reserve contract, positioning NFE as a “leading” LNG-to-power company in Brazil.

NFE said in a statement it would acquire the Portocem power purchase agreement in exchange for newly issued NFE redeemable series A convertible preferred stock and the assumption of certain liabilities from a subsidiary of Ceiba Energy.

Ceiba Energy, backed by US-based investment firm Denham Capital, won a bid in December 2021 for a 15-year PPA to build, own, and operate a new 1.6 GW power plant in Brazil.

The company’s Portocem LNG-to-power project, which includes an FSRU, won 30 percent of the total demand offered by Brazil’s power regulator Aneel and the Ministry of Energy.

“Following customary closing conditions including regulatory approval for the transfer of the PPA in Brazil, the PPA will contribute firm capacity payments of $280 million per annum through its 15-year contract life,” NFE said in the statement.

NFE expects the transaction to close in March 2024, with project cash flows expected to begin no later than July 2026.

Barcarena and TGS

NFE said it plans to leverage its existing infrastructure in Brazil and transfer the PPA to new power assets connected to NFE’s existing Brazilian LNG terminals – Barcarena and Terminal Gas Sul (TGS).

The 160,000-cbm, Energos Celsius, which will serve NFE’s FSRU-based LNG import terminal in Barcarena, has recently left Seatrium’s yard in Singapore and is on its way to Brazil.

Besides the Barcarena facility, NFE said in November that its LNG import terminal in Santa Catarina, Brazil will start commercial operations in January 2024.

NFE has executed a definitive deal to charter the 138,250-cbm FSRU Energos Winter from Brazil’s state-owned energy firm Petrobras starting in December 2023.

According to NFE, the compaby intends to utilize its existing infrastructure in place in Barcarena to strategically expand its power complex by 1.2 GW, with an expected commercial operations date (COD) for the expansion in 2026.

NFE’s original 630 MW development in Barcarena “remains on schedule” for COD in the third quarter of 2025, it said.

The firm plans to transfer the remaining 0.4 GW of the PPA to another power generation asset that connects to its TGS terminal.

By using its existing asset base, NFE expects to “reduce costs and generate incremental throughput and earnings at its terminals,” it said.

With the acquisition of the PPA, NFE adds “significant” downstream power infrastructure to its asset base, enabling further utilization of its existing terminal infrastructure in Barcarena and TGS.

The TGS terminal is uniquely positioned to continue to alleviate natural gas supply issues for more than 3 GW of existing industrial and power generation customers who currently experience limitations on supply in the region, the firm said.

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