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NFE Aims to Transfer Contract from UTE Portocem to LNG Terminals in Barcarena and TGS, Aiming to Invest in Clean Energy and Overcome Gas Limitations.
The acquisition of 1.6 GW in contract from UTE Portocem by New Fortress Energy (NFE) was recently announced. NFE will assume the obligations and revenue of the capacity reserve contract of the Portocem Thermal Power Plant in exchange for convertible preferred shares.
The agreement, lasting fifteen years, involves the payment of US$ 280 million per year to NFE and was won by UTE Portocem in the 1st Power Capacity Reserve Auction in 2021. The conclusion of the agreement is subject to regulatory agency approval. New Fortress Energy (NFE) is expanding its operations in the energy sector with this acquisition of the Portocem Thermal Power Plant.
Business Expansion in Brazil
New Fortress Energy (NFE) announced the acquisition of 1.6 GW in contract from UTE Portocem, marking a significant step in its strategy for expansion in the Brazilian clean and reliable energy market. The transaction, expected to close in March 2024, will bring new cash flows and represent a consistent investment in thermal energy assets connected to the company’s Liquefied Natural Gas (LNG) terminals in Brazil, such as Barcarena in Pará and the Gas Sul Terminal (TGS) in Santa Catarina.
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Impact of the Transaction
The acquisition of the contract from UTE Portocem reinforces NFE’s presence in the Brazilian market, providing a solid foundation for supplying clean and reliable energy to the country’s growing economy. The company’s strategy to invest in thermal energy assets, as a result of the transaction, aligns with its pursuit of vertical integration and asset optimization to generate sustainable long-term value for its shareholders.
Project Development
The investment in UTE Portocem, valued at approximately R$ 4.7 billion, is part of a larger project developed by Ceiba Energy, located in the Export Processing Zone of Ceará (ZPE Ceará), in the Pecém Industrial and Port Complex (CIPP). With a total project size of 1.6 GW, NFE plans to further expand its business in Brazil, allocating 1.2 GW in Barcarena by 2026 and the remaining 0.4 GW to energy generation assets connected to TGS.
Asset Integration and Strategic Alignment
New Fortress Energy intends to utilize its existing asset base, optimizing vertical integration to reduce costs, generate yield, and achieve incremental gains at its terminals. With the acquisition of the Portocem PPA, the company incorporates a long-term contracted asset that complements its presence in Brazil, demonstrating a strong alignment with its long-term business strategy.
Impact on Natural Gas Supply
The Gas Sul Terminal (TGS) represents an opportunity to address some of the limitations in natural gas supply in the region, catering to a demand that includes over 3 GW of industrial and power generation customers. This venture will play a crucial role in the expansion and improvement of energy infrastructure in Brazil, becoming a milestone in New Fortress Energy’s commitment to providing clean and reliable energy to the country.
Source: EPBR
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