Energy-Strapped Puerto Rico Secures LNG Supplies

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Drawing on reserves from Mexico, New Fortress Energy (New York, New York) said it was committed to delivering liquefied natural gas (LNG) to Puerto Rico for the next seven years.

Puerto Rico ensures steady feedstock for its power systems through a long-term arrangement with New Fortress Energy. Wes Eden, the company's chairman and chief executive officer, said discussions with the government of Puerto Rico have paid off, with two critical benefits to the island, a self-governed unincorporated territory of the U.S.

"First, it establishes security of supply in San Juan for the next seven years for power plants currently running on LNG," he said. "Second, it provides for incremental LNG volumes to be delivered, allowing for the conversion of additional gas ready plants currently burning diesel, resulting in hundreds of millions of dollars in energy savings for Puerto Ricans."

Supplies would come from the Fast LNG facility off the coast of Altamira, Mexico. The facility is designed to deliver some 1.4 million metric tons of LNG per year. Running feedstock since the fourth quarter, New Fortress said Tuesday the plant was operating above its nominal capacity.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can learn more about the Fast LNG facility in a detailed project report and plant profile.

Bilateral negotiations in July saw the contractual terms revised from 15 years to seven, with an option for a three-year extension. New Fortress said the agreement still requires the approval of an oversight board in Puerto Rico.

The agreement aligns with a pledge from Gov. Jennifer Gonzalez Colon, a right-leaning progressive, who swore to stabilize the grid when taking the oath of office in January.

The start of her tenure followed a massive blackout that left 90% of Puerto Rico's power users without service, days ahead of New Year's celebrations. According to Puerto Rico grid operator Luma Energy, the cause of the massive blackout was unclear, although preliminary investigations suggested a failure from an underground power line.

In April, the government signed an executive order that expanded an energy emergency declaration after witnessing a 33% shortfall in power generation due to its aging infrastructure.

New Fortress is drawing on the 7.1 trillion cubic feet of estimated natural gas reserves in Mexico for feedstock for its Fast LNG facility. Mexico, however, has witnessed steady declines in natural gas production since at least 2021 and remains a net importer of natural gas from the U.S.

New Fortress, for its part, is on its backfoot financially. The company took a net loss of $557 million in the second quarter of 2025. In its deal with Puerto Rico, LNG volumes will be priced at 115% of the benchmark for Henry Hub, plus additional fees. Henry Hub was trading Wednesday at about $3.10 per million British thermal units.

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