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Gas Market: Capacity Agreement, Transaction Payment, Preferred Shares, Regulatory Agency, Cash Flow Approval. Adjustments in Thermal Power.
New Fortress Energy (NFE) has closed an agreement to acquire the obligations and revenue from the 1.6 GW capacity reserve contract of the Portocem Thermal Power Plant (UTE Portocem), a subsidiary of Ceiba Energy, in exchange for convertible preferred shares. The fifteen-year contract provides for a payment of US$ 280 million per year to NFE and was secured by UTE Portocem in the 1st Capacity Reserve Auction, held in 2021 by Aneel. The completion of the transaction is subject to regulatory agency approval. New Fortress Energy (NFE) is expanding its asset portfolio with the agreement to take over the obligations and revenue from the 1.6 GW capacity reserve contract of the Portocem Thermal Power Plant (UTE Portocem). The company reinforces its presence in the energy market with this strategic transaction. Source: Click Oil and Gas.
Acquisition of Contracted Assets by New Fortress Energy (NFE)
NFE expects that the transaction will be completed in March 2024, with the cash flows from the project expected to start by July 2026 at the latest.
Expansion of New Fortress Energy’s Presence in Brazil
The company’s idea is to transfer the contract to the assets of thermal power connected to the LNG terminals that the company owns in Brazil: Barcarena, in Pará, and Terminal Gas Sul (TGS), in Santa Catarina. Both are expected to be in operation by early 2024.
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Expansion of New Fortress Energy’s Energy Complex
We are extremely pleased to expand our business in Brazil and solidify NFE as a leading provider of clean and reliable energy for one of the fastest-growing economies in the world,’ said Wes Edens, President and CEO of New Fortress Energy.
With a 1.6 GW project, UTE Portocem is a investment from Ceiba Energy, worth approximately R$ 4.7 billion, which is currently in construction phase in the Ceará Export Processing Zone (ZPE Ceará), within the Industrial and Port Complex of Pecém (CIPP).
Future Expansion Projects of New Fortress Energy
NFE’s strategy is to expand its energy complex by 1.2 GW in Barcarena by 2026, while the remaining 0.4 GW will be allocated to power generation assets connected to TGS.
The original development of 630 MW by NFE in Barcarena remains on schedule for the third quarter of 2025.
Benefits of New Fortress Energy’s Strategy
By utilizing its existing asset base, the company expects to reduce costs and generate yield and incremental gains at its terminals.
Alignment with New Fortress Energy’s Vertical Integration Strategy
‘With the acquisition of the Portocem PPA, we add a contracted asset of long duration that is highly complementary to our presence in Brazil. This aligns with our strategy of vertical integration and optimization of our assets in an effort to create value for shareholders in the long term’, said Andrew Dete, General Director of New Fortress Energy.
Impact of the TGS Terminal on the Region
The TGS terminal expects to alleviate part of the limitations in natural gas supply in the region, which includes over 3 GW of industrial and power generation customers.
Source: EPBR
