New Fortress Energy Announces It Has Sold The Emergency Power Plants It Constructed On Behalf Of The U.S. Army Corps Of Engineers In San Juan And Palo Seco To PREPA For $373M In Cash

Author: Happy Mohamed | March 18, 2024 08:38am

Summary Highlights

• NFE sold two operating power plants to the Puerto Rico Electric Power Authority ("PREPA")
• NFE awarded 80 TBtu gas supply contract in Puerto Rico, more than doubling the volumes of gas it currently provides to these plants

New Fortress Energy Inc. (NASDAQ:NFE) (the "Company") is pleased to announce two transactions that further solidify our commitment to providing affordable and sustainable energy solutions in Puerto Rico.

The Company sold the emergency power plants it constructed on behalf of the U.S. Army Corps of Engineers in San Juan and Palo Seco to PREPA for $373 million in cash, subject to certain items and conditions. These plants were developed by the Company in 2023 in rapid response to a competitive bid by the U.S. Army Corps of Engineers to provide emergency power in order to stabilize the power grid in Puerto Rico. They have become a cornerstone of Puerto Rico's energy portfolio, delivering critical baseload power to stabilize the grid in the aftermath of recent natural disasters, and as contemplated, their ownership has been transferred to PREPA.

Following a competitive bid process, NFE was awarded and has entered into a new island-wide 80 TBtu gas supply contract with PREPA, ensuring continued gas supply to these power plants for up to four years. The expanded volumes under the contract will enable conversion of other plants on the island from diesel to gas, providing lower cost, cleaner energy to Puerto Rico.

As a result of the early termination of the contracts that have governed the construction, operations, and associated costs of these plants, NFE expects to negotiate a mutually beneficial settlement of all outstanding obligations in the near future.

"We entered the Puerto Rico market in 2017 based on the island's emergency need for natural gas and power. The transactions announced today mark a significant milestone in our continued commitment to Puerto Rico's energy security and cost reduction efforts while significantly increasing our business in the region," said Wes Edens, Chairman and CEO of New Fortress Energy.

A brief description of these transactions can be found on the NFE website for your reference.

Posted In: NFE