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NFE Transfers Contract from UTE Portocem to Thermoelectric Power Plants Connected to the GNL Terminals in Barcarena and TGS, Seeking Incremental Gains.
New Fortress Energy (NFE) has reached an agreement to acquire the responsibilities and revenue from the 1.6 GW capacity reserve contract of the Portocem Thermoelectric Plant (UTE Portocem), a subsidiary of Ceiba Energy. This agreement involves the exchange of convertible preferred shares of NFE.nodiscard
The fifteen-year contract involves an annual payment of US$ 280 million 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 approval by the regulatory agency, ensuring another promising deal for New Fortress Energy.
Acquisition of PPA from the Portocem Thermoelectric Plant by New Fortress Energy
New Fortress Energy (NFE) is looking forward to finalizing the transaction in March 2024, with the cash flows from the project expected to begin by July 2026 at the latest. The company’s plan is to transfer the contract to the thermoelectric energy assets connected to the Liquefied Natural Gas (LNG) terminals that the company owns in Brazil: Barcarena, in Pará, and Terminal Gas Sul (TGS), in Santa Catarina. Both are expected to enter into operation by early 2024.
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Expansion of NFE in Brazil
The President and CEO of New Fortress Energy, Wes Edens, stated that the company is extremely pleased to expand its operations in Brazil, establishing itself as a leading provider of clean and reliable energy for one of the fastest-growing economies in the world.
Investment in the Portocem Thermoelectric Plant
With an investment in Ceiba Energy of approximately R$ 4.7 billion, UTE Portocem, with a capacity of 1.6 GW, is under construction in the Export Processing Zone of Ceará (ZPE Ceará), in the Pecém Industrial and Port Complex (CIPP). NFE’s strategy includes expanding 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.
Impact on NFE’s Development Timeline
The original development of 630 MW by NFE in Barcarena remains on schedule, with completion expected in the third quarter of 2025. Leveraging its existing asset base, the company expects to reduce costs and generate yield and incremental gains at the terminals. The acquisition of the Portocem PPA adds a contracted asset of long duration that is highly complementary to NFE’s presence in Brazil, aligning with the strategy of vertical integration and asset optimization in an effort to generate long-term shareholder value, as stated by Andrew Dete, General Director of New Fortress Energy.
Solutions for Limitations in Natural Gas Supply
The TGS terminal expects to alleviate some limitations in natural gas supply in the region, which includes over 3 GW of industrial and power generation customers.
Source: EPBR
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