US-listed New Fortress Energy plans to double the number of LNG terminals in its portfolio to 10 by the end of next year, and is seeking to team these up with a move into LNG bunkering and small-scale shipping.
Speaking in a results briefing, New Fortress co-founder, chairman and chief executive Wes Edens said the aim is for the company to be fully committed to developing, building or operating 10 facilities, which would all be fully operational by the end of 2021.
Edens said this is the short-term focus.
“Obviously, we think that the market is substantially greater than 10 terminals,” he said, adding that the company is looking at 100 potential projects worldwide.
New Fortress, which recently chartered in the 27,500-cbm JS Ineos Independence (built 2017) from Evergas, currently has five LNG terminals: three in Jamaica that are fully operational; one in Puerto Rico, which will fire up shortly; and one that is being built in Mexico.
Constructing a beachhead
Edens described “demand aggregation” as the “lifeblood” of New Fortress’ business.
He described the company's model as building “a beachhead”, where a terminal can be constructed, getting a reasonable return to enter a market and then amassing demand from power suppliers and small-scale commercial users.
He said: “An area that we think has tremendous promise [is] the transportation sector, particularly in the shipping side.”
Edens said New Fortress now has proven capability "unmatched by anyone" in ship-to-ship transfers, implying that this experience could be used to position the company in the growing LNG-bunkering sector.
He said: “Our goal is to use these terminals as storage vessels that use smaller ships to act as shuttle vessels between big ships and other ships that could come in.”
He added that New Fortress is going to be “critical” in providing LNG logistics.
“I think it may be the kind of situation where we partner up with different shipowners or different people that have a strategic foothold in the business,” he said.
Edens said it is hard to speak about the shipping markets without using superlatives.
“There's no doubt it's going to be a big impact on our business over time," he said.
“I think that the company and the group that has access to the most important logistics points and the most important terminals is the one that's going to really be a winner here,” he said.
Edens also revealed that New Fortress is on the brink of buying some LNG volumes on term contracts, following a tender process run by the company.
He said New Fortress had received 10 offers and expects to make its selection by the end of the year.
