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New Fortress subsidiary to supply gas to San Juan power plant

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LNG Industry,

New Fortress Energy LLC has announced that its Puerto Rico subsidiary, NFEnergía LLC, has entered into a contract with the Puerto Rico Electric Power Authority (PREPA) for the supply of natural gas and the conversion of Units 5 and 6 of the San Juan combined cycle power plant.

According to the statement, the contract’s initial term is five years, with options for PREPA to extend this for three additional five-year periods. PREPA estimates that the conversion of these units from diesel to natural gas will generate approximately US$750 million in fuel cost savings over five years for PREPA and significantly reduce emissions.

Wes Edens, Founder and CEO of New Fortress, said: “This is a very pivotal transaction for PREPA and Puerto Rico.

“The conversion of San Juan Units 5 and 6 to natural gas will save hundreds of millions of dollars and accelerate the modernisation of critical power infrastructure. Natural gas power is cleaner, cheaper and is the perfect complement to renewable energy. New Fortress is proud to invest in the security and sustainability of Puerto Rico’s clean and renewable energy future.”

After a number of conversion attempts over the course of the last 10 years, PREPA reportedly launched a competitive request for proposal (RFP) bid process (RFP #81412) in July last year for the supply of fuel and the conversion of the San Juan power plant’s Units 5 and 6. According to the statement, NFEnergía’s bid was based on 14 grading criteria, which included experience and capacity, approach and methodology, and price.

José Ortiz Vázquez, PREPA Chief Executive Officer, said: “For the first time, this infrastructure project will successfully bring natural gas to the north of Puerto Rico, achieving one of the strategic objectives of the Island’s energy sector. It also provides substantial savings to our customers and reduces carbon dioxide (CO2 emissions), which impact the environment and climate change.”

New Fortress claims that the contract has received approval from both the Puerto Rico Energy Bureau and the Financial Oversight and Management Board for Puerto Rico.

The company claims that gas will be supplied by NFEnergía from its micro fuel handling facility in the Port of San Juan, which has been under development for over a year. The facility is being built with multiple truck loading bays to provide LNG to industrial customers and micro-grids on the island.

According to the statement, the unit conversion operation and the development of the micro fuel handling facility are expected to be complete by mid-2019.

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