New Fortress Energy LLC has announced that the Company entered into an agreement with Centrica LNG Company Limited (Centrica) to terminate New Fortress’s obligation to purchase any additional LNG from Centrica for the remainder of 2020 in exchange for a payment of US$105 million. As a result, New Fortress will now be able to purchase LNG in the open market at prices that are significantly lower than the price previously agreed to with Centrica.
As a result of facilities commencing operations in Puerto Rico in addition to Jamaica, New Fortress has made significant progress toward achieving an Illustrative Annualised Operating Margin Goal from Committed Volumes of over US$400 million on an annualised basis during the 3Q20. The company expects its annualised cash SG&A and annualised cash interest payments to be approximately US80 million and US$80 million, respectively, during the same period.
In addition, the Company is currently advancing projects in both Mexico and Nicaragua, with the goal of substantially completing these projects by the end of 2020. Once fully operational, New Fortress aims for these projects to contribute an additional approximately US150 million toward the Company’s Illustrative Annualised Operating Margin Goal from Committed Volumes.
CEO and Chairman Wes Edens remarked, “Our flexibility to opportunistically purchase LNG at market prices completes our transition from a development company to an operating company that we expect will generate significant operating margin and cash flow. We continue to advance a number of compelling new business opportunities and expect significant growth in 2020 and beyond. In spite of the current COVID conditions, we have a very robust pipeline of additional projects. Our current goal is to bring online another 4 - 8 projects in 2021 of similar size and scale. We look forward to bringing more affordable and cleaner natural gas and power to our customers this year.”
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