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New Fortress to acquire Brazil LNG-to-power project

26 Sep 2017, 8.31 pm GMT

New Fortress to acquire Brazil LNG-to-power project

Sao Paulo, 26 September (Argus) — US LNG company New Fortress Energy reached an agreement with Brazilian firm Bolognesi Energia to acquire its planned LNG terminal and associated 1.3GW Rio Grande thermoelectric project.

The Rio Grande power plant will use regasified LNG delivered into a floating storage and regasification unit (FSRU). The complex is worth an estimated R3bn ($946mn).

The project won long-term power purchase agreements (PPAs) in a November 2014 auction for supply starting in January 2019, but it is significantly behind schedule. Bolognesi successfully renegotiated the PPAs with distributors and pushed back the start date of the contracts to January 2021.

Although Aneel granted Bolognesi's request for an extension, the regulator gave the company a hard deadline of the end of August to demonstrate the project's viability and to prove it has secured financing and LNG supply. The company also needs to secure environmental permits by 31 December 2017.

New Fortress said it would be working together with Bolognesi to obtain the necessary environmental permits, but did not disclose the size of the transaction. The deal is subject to regulatory approval.

In June, Brazilian firm Prumo Logistica reached an agreement with Bolognesi to buy its Novo Tempo LNG-to-power project.

Prumo said it will seek authorization to transfer the project location from Pernambuco state to the Port of Acu in Rio de Janeiro state where it plans to develop an LNG gas hub.

New Fortress recently partnered with Jamaica Public Service (JPS) to deliver LNG to Jamaica.


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