New Fortress Energy expects to save $65m a year by owning the 13 vessels it is acquiring under its buyout of Hygo Energy Transition and Golar LNG Partners over chartering in the ships.
New Fortress chief executive Wes Edens said that to lease the nine floating storage and regasification units and four LNG carriers would have cost his company $215m each year.
By contrast, owning the two outfits slims this to $150m, a saving of 30%.
Edens revealed the analysis on a conference call with investors after New Fortress, an expanding gas-to-power specialist, announced its $5.1bn deal to buy Hygo, Golar Partners and some Brazilian power purchase agreements.
“You control your own assets. You control your own destiny. It’s the obvious choice to make,” Edens said.
“For a modest amount of capital we end up saving a very substantial amount of operating income every year.”
Edens revealed that New Fortress needs eight FSRUs and four floating storage units (FSUs). Under the buyout, it will acquire nine FSRUs and four FSUs.
The company is already using one FSRU in Jamaica and will acquire a second in-service unit from the buyout when it takes on the regasification unit for the Sergipe power plant in Brazil.
New Fortress' presentation showed that it will deploy one FSRU at each of its incoming new Brazilian import projects at Suape, Barcarena and Santa Catarina.
Three other FSRUs are listed to be deployed against unnamed “pipeline projects”.
New Fortress plans to deploy one FSU at each of its existing projects in La Paz, Mexico, and Nicaragua, while the remaining pair are labelled as “general transport”.
Edens said the markets for New Fortress' five existing terminals have the potential to take a further 3.1 million tonnes per annum (mtpa) of LNG.
In three separate transactions for $5.1bn equivalent enterprise value, New Fortress Energy is acquiring:
- 100% of Hygo Energy Transition, a 50:50 joint venture between Golar LNG and Stonepeak Infrastructure Partners
- 100% Golar LNG Partners, which is 32% owned by Golar LNG
- 288MW of power purchase agreements in Brazil to support and develop a terminal and power plant in Suape port
But he said a "conservative" market size for the four Brazilian FSRU-based terminals New Fortress is acquiring is 27 mtpa.
“With this transaction it is not the least bit of an overstatement to say we have now become the premier global gas-to-power company in the world,” he said.
Edens said the goal is to take final investment decisions (FIDs) on the projects for Barcarena, Suape and Santa Catarina terminals in the second quarter and have these facilities in operation by the end of this year.
He said New Fortress does not need to raise additional equity to pay for its $5.1bn transaction. But he raised the prospects of selling long-term contracted assets such as FSRUs or power plants in the future.
He named the 170,000-cbm FSRU Golar Nanook (built 2017), which is fixed on 25-year charter and serves the Sergipe power plant in Brazil, as a possible candidate.
But he said LNG import terminals will remain “the lifeblood” of the company.
Outside Brazil, Edens, who confided that he has recently visited Sri Lanka and Colombia and is heading to Brazil next week, said New Fortress is also focused on another four or five markets. He mentioned Ireland and hinted at an FID there by mid-year without giving details.
“Our goal at end of year is 15-20 terminals. We are at nine right now,” he said. “There is a good chance to get from here to there.”
| Ship | Cbm | Built | Type |
| Celsius | 160,000 | 2013 | TFDE LNG carrier* |
| Penguin | 160,000 | 2014 | TFDE LNG carrier* |
| Princess | 138,000 | 2003 | steam turbine LNG carrier |
| Mazo | 135,000 | 2000 | steam turbine LNG carrier |
| Maria | 145,000 | 2006 | steam turbine LNG carrier |
| Grand | 145,000 | 2006 | steam turbine LNG carrier |
| Spirit | 129,000 | 1981 | LNG carrier-FSRU conversion |
| Winter | 138,000 | 2004 | LNG carrier-FSRU conversion |
| Freeze | 125,000 | 1976 | LNG carrier-FSRU conversion |
| NR Satu | 125,000 | 1977 | LNG carrier-FSRU conversion |
| Igloo | 170,000 | 2014 | FSRU |
| Eskimo | 160,000 | 2014 | FSRU |
| Nanook | 170,000 | 2018 | FSRU |
* candidate for FSRU conversion
