New Fortress Energy (NFE) has set out a plan to sell down its stakes in 11 LNG vessels and two deals in Mexico.
NFE said it would create a joint venture with Apollo, the asset manager. Apollo will have an 80% stake and NFE 20%.
NFE said it would receive $1.1 billion after accounting for its share of the venture and paying down debt. The total project is worth around $2bn. The transaction should close in the third quarter of this year.
The 11 vessels include six FSRUs, two LNG carriers and three floating storage units (FSUs). NFE will charter 10 of the 11 vessels from the venture for up to 20 years.
“Together with Apollo, we are creating a leading LNG marine infrastructure platform to help accelerate the energy transition while freeing up capital to continue to invest into our Fast LNG and downstream LNG projects worldwide,” said NFE chairman and CEO Wes Edens.
“We are pleased to be partnering with Apollo in creating a maritime infrastructure company that will help support NFE’s growing LNG infrastructure needs going forward.”
The LNG company said it would use the proceeds from the deal to fund its floating LNG projects, in addition to ongoing downstream infrastructure and corporate needs.
NFE would provide downstream operations and development, while Apollo brings investment and maritime expertise.
A partner at Apollo, Brad Fierstein, said the energy transition and reliability were “global priorities and core to Apollo’s sustainable investing platform”.
The investment with NFE helps support these objectives, he said. “This is a high-quality portfolio that increases energy security around the world, accelerates decarbonization efforts, and facilitates LNG use which is cleaner and more affordable than diesel.”
An early instance of NFE’s FLNG efforts were also announced today, under a deal with Mexico’s Pemex. The deal focuses on the joint development of the deepwater Lakach field.
This will provide gas for Mexican demand in addition to exports for global markets.
NFE head Edens described the agreement with Pemex as an “important strategic partnership”. This is the first of a number of such project, he said. It is an “ideal formula for offshore gas assets around the world … [combining] gas for domestic use with gas for export”.
The company will complete seven offshore wells on Lakach over the next two years. It will also provide a 1.4 million tonne per year FLNG unit, with the aim of liquefying most of the gas from the field.
The two companies believe Lakach will produce for around 10 years. Nearby fields Kunah and Piklis could increase this to 3.3 tcf.
Lakach holds 1.1 trillion cubic feet of gas in place. Pemex discovered the field in 2007, which is around 70 km off southeast Mexico.
The Lakach deal fits into NFE’s broader plans for Mexico. The company has also struck a deal with Comisión Federal de Electricidad (CFE).
NFE will expand its provision of gas locally, while also securing feegas from CFE for two FLNG units, off Altamira.
NFE began regasification on the west coast of Mexico in mid-2021 at a terminal in Baja California Sur. The company will increase gas deliveries there and also sell its own power plant to CFE.
On the eastern coast, meanwhile, NFE and CFE will create an LNG export hub at Altamira. CFE will use its existing pipeline capacity to provide gas and will also have its own share of LNG to market.