New Fortress to supply LNG to Puerto Rico
Puerto Rico's government-owned utility Prepa contracted New Fortress Energy to supply LNG for a San Juan power plant that is undergoing a conversion from oil to gas.
US company New Fortress will supply about 500,000 t/yr of LNG for units 5 and 6 of the San Juan complex that have combined capacity of 440MW, Prepa told Argus.
New Fortress also plans to supply several small consumers from its San Juan floating storage and regasification unit (FSRU) that will begin commercial operations in second quarter 2019, the company said in a filing with the US Securities and Exchange Commission (SEC).
New Fortress is currently preparing to launch an initial public offer (IPO) for $300mn.
This will be the island's second LNG-to-power project. Independent power producer EcoEléctrica operates a 540MW thermal plant with associated regasification infrastructure on the southern coast. Spain's Naturgy owns 47.5pc of EcoEléctrica.
Another project was aborted in December 2018 when US LNG company Excelerate Energy and Prepa scrapped a plan to construct a $400mn LNG-to-power project that was intended to fire 1,492MW of converted capacity at the Aguirre power complex in the island's south.
"This project with New Fortress Energy is the start of a renewed plan to diversify the island's fuel matrix, reduce production costs and reduce the release of damaging pollutants from power plants," Prepa said.
New Fortress says the plant conversions from diesel would allow Prepa to save $285mn per year after one-time conversion costs while burning cleaner fuel.
The San Juan project is designed as a "landed multi-fuel handling facility… and is being constructed with multiple truck loading bays to provide LNG to on-island industrial users," New Fortress said in the SEC filing.
In parallel to the plant conversions, the government of the US territory plans to establish public-private partnerships to manage Prepa's transmission system and distribution networks, and is considering four entities, government agency P3 Authority said last week.
Mainland firms Duke Energy, Exelon, PSEG Services and a consortium led by Quanta Services are in the running for the partnerships.
The P3 Authority is sending requests for proposal to the companies, and expects to select the project manager in the third quarter.
Prepa has "completely" rehabilitated the island's transmission grid that was destroyed by a hurricane in September 2017, the utility said.
Elsewhere in the Caribbean, New Fortress completed the installation of a second FSRU in Jamaica in December 2018 that will supply 200,000 t/yr of LNG to a 190MW power station that utility JPSCo plans to commission by June 2019. The firm is already supplying 60,000 t/yr of LNG from another FSRU for JPSCo's 120MW Bogue power plant.
New Fortress also plans to develop the Jamaican southern coast facility into a bunkering hub.
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