Shares of New Fortress Energy Inc. (NASDAQ:NFE) jumped 23% in pre-market trading Wednesday following the announcement of a major long-term gas supply agreement with the Puerto Rican government.
The company reached terms with Puerto Rico’s Third-Party Procurement Office and Public-Private Partnerships Authority for a seven-year liquefied natural gas (LNG) supply contract. The agreement is now under review by the Financial Oversight and Management Board of Puerto Rico.
Under the contract, NFE will supply up to 75 TBtu of natural gas per year, with minimum annual volumes of 40 TBtu, potentially rising to 50 TBtu if certain conditions are met. The deal is designed to replace costly, high-emission liquid fuels with cleaner natural gas.
Most gas volumes will be priced at 115% of Henry Hub plus $7.95/MMBtu, while supplies for San Juan units 5 & 6—historically consuming around 20 TBtu annually—will be priced at 115% of Henry Hub plus $6.50/MMBtu. The volumes will be delivered through NFE’s 1.4 MTPA Fast LNG facility off Altamira, Mexico, which started operations in late 2023 and is currently running above its nameplate capacity.
“Matching our LNG production with long term offtake has always been our goal. This locks in sustainable long-term margins for NFE and provides a foundation of financial stability for our company,” said Chris Guinta, CFO of New Fortress Energy.
The deal complements NFE’s existing 25-year supply contract with Energiza for a new 550 MW power plant under development in Puerto Rico.
New Fortress Energy stock price
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