New Fortress Energy Provides Update on its Initial FLNG Asset

Rhea-AI Summary

New Fortress Energy (NFE) has provided an update on its initial Fast LNG (FLNG) asset located offshore Altamira, Mexico. The asset is performing well and is scheduled to conclude commissioning and preproduction run on August 9th. The first partial LNG cargo will be loaded onto the Energos Princess and delivered to NFE's La Paz, Mexico terminal. After a brief scheduled maintenance outage, the FLNG asset is expected to resume operations and reach full production later in August 2024.

NFE's Chairman and CEO, Wes Edens, emphasized the significance of this milestone, stating that supplying customers with their own LNG has been a long-term goal for the company. This achievement reinforces NFE's position as a leading vertically integrated gas to power company, providing an end-to-end solution for customers.

Positive

• FLNG asset performing well as expected
• First partial LNG cargo to be loaded on August 9th
• Expected to reach full production in August 2024
• Milestone achievement in supplying customers with company's own LNG
• Reinforces position as a leading vertically integrated gas to power company

Negative

• Scheduled maintenance outage of several days after first load

Insights

Energy Industry Analyst

New Fortress Energy's (NFE) announcement of its first FLNG asset reaching the commissioning stage marks a significant milestone in the company's vertical integration strategy. This development has several implications for the energy sector and NFE's market position:

• The successful commissioning of the FLNG asset offshore Altamira, Mexico, demonstrates NFE's ability to execute complex projects in the LNG space, potentially enhancing investor confidence.
• Vertical integration into LNG production could lead to improved profit margins and greater control over the supply chain, reducing dependence on third-party suppliers.
• The scheduled first partial LNG cargo to be loaded onto the Energos Princess and delivered to NFE's La Paz terminal showcases the company's end-to-end capabilities in the gas-to-power value chain.
• The expected full production later in August 2024 suggests a ramp-up period of approximately one year, which is relatively quick for such a complex asset.

However, investors should note that the scheduled maintenance outage following the first load indicates that there may be some fine-tuning required before full production is achieved. This is not uncommon for new LNG facilities but warrants monitoring for any potential delays or issues.

The strategic importance of this development lies in NFE's enhanced ability to provide an integrated solution for natural gas and power supply. This could potentially lead to increased market share and improved competitive positioning, especially in emerging markets where energy infrastructure is developing rapidly.

From a financial perspective, while specific figures are not provided, the successful operation of this FLNG asset could translate into revenue growth and potentially improved EBITDA margins for NFE in the coming quarters. Investors should look for updates on production rates and financial impacts in future earnings reports.

Financial Analyst

The commissioning of New Fortress Energy's (NFE) initial FLNG asset represents a pivotal moment in the company's financial trajectory. Here's a breakdown of the potential financial implications:

• Revenue Stream Diversification: By producing its own LNG, NFE is adding a new revenue stream, potentially reducing volatility in its financial performance.
• Cost Structure: Vertical integration typically leads to cost efficiencies. NFE may see reduced costs associated with LNG procurement, which could positively impact gross margins.
• Capital Expenditure Cycle: The completion of this major project suggests a potential shift in NFE's capex cycle. Investors should watch for guidance on future capital allocation strategies.
• Balance Sheet Implications: The transition from construction to operation phase for this asset may lead to changes in how it's reflected on the balance sheet, potentially affecting key financial ratios.

While the news is positive, it's important to consider the ramp-up period and potential for initial operational challenges. The scheduled maintenance outage, although brief, indicates that full financial benefits may not be immediate.

Investors should look for the following in upcoming financial reports:

• Changes in operating expenses related to FLNG operations
• Impact on cash flow from operations
• Any revisions to revenue or EBITDA guidance for FY2024 and beyond
• Details on contract structures for LNG sales from this asset

The market's reaction to this news will be telling. If NFE's stock price doesn't fully reflect the potential of this development, it could present an opportunity for investors who believe in the long-term value of vertical integration in the LNG sector.

Lastly, the ability to provide an end-to-end solution could enhance NFE's competitive position, potentially leading to improved contract terms and customer retention, which would have positive long-term financial implications.

NEW YORK--(BUSINESS WIRE)-- New Fortress Energy Inc. (NASDAQ: NFE) (“NFE” or the “Company”) today is pleased to provide an update on its initial Fast LNG asset located offshore Altamira, Mexico (“FLNG”).

NFE’s FLNG asset is performing well as expected. The asset is scheduled to conclude commissioning and its preproduction run on Friday, August 9th, with the first partial LNG cargo set to be loaded onto the Energos Princess. This cargo will then be delivered to NFE’s La Paz, Mexico terminal in the following days.

Following the significant milestone of first load, our FLNG asset will undergo a scheduled maintenance outage of several days. After this, FLNG will resume operations and is expected to reach full production later in August 2024.

“Being able to supply our customers with our own LNG has been a goal for the company for many years. Natural gas and power supply are critical components of a sustainable, affordable, and cleaner energy system and we are grateful to now be able to provide an end-to-end solution for our customers. This milestone reinforces NFE’s position as a leading vertically integrated gas to power company,” said Wes Edens, Chairman and CEO of New Fortress Energy.

About New Fortress Energy Inc.

New Fortress Energy Inc. (NASDAQ: NFE) is a global energy infrastructure company founded to address energy poverty and accelerate the world’s transition to reliable, affordable, and clean energy. The Company owns and operates natural gas and liquefied natural gas (LNG) infrastructure and an integrated fleet of ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. Collectively, the Company’s assets and operations reinforce global energy security, enable economic growth, enhance environmental stewardship and transform local industries and communities around the world.

Cautionary Language Regarding Forward-Looking Statements

This communication contains forward-looking statements. All statements contained in this communication other than historical information are forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance or our projected business results. You can identify these forward-looking statements by the use of forward-looking words such as “expects,” “may,” “will,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these terms or other comparable words. Forward looking statements include but are not limited to: expectations related to the first cargo and scheduled maintenance.

These forward-looking statements are necessarily estimates based upon current information and involve a number of risks, uncertainties and other factors, many of which are outside of the Company’s control. Actual results or events may differ materially from the results anticipated in these forward-looking statements. Specific factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to: failure to receive the expected fixed payments under our contracts, unknown and unforeseen risks related to the full commercial operation for our first LNG Asset, delays and schedule changes, high costs and expenses, and regulatory and legal challenges, among others; inability to operationalize our plans for the projects and derive the benefits expected; common risks related to successful integration of the businesses; nonpayment or nonperformance of obligations by the parties; inability to realize the anticipated benefits from the project or our partnerships; adverse regional, national, or international economic conditions, adverse capital market conditions and adverse political developments; business disruption following the transaction; and the impact of public health crises, such as pandemics and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets. These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of NFE’s forward-looking statements. Other known or unpredictable factors could also have material adverse effects on future results.

Any forward-looking statement speaks only as of the date on which it is made, and we undertake no duty to update or revise these forward-looking statements, even though our situation may change in the future. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in NFE’s annual and quarterly reports filed with the Securities and Exchange Commission, which could cause its actual results to differ materially from those contained in any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240802837491/en/

Investors

Chance Pipitone

ir@newfortressenergy.com

Media

press@newfortressenergy.com

Source: New Fortress Energy Inc.

FAQ

When will New Fortress Energy's FLNG asset load its first LNG cargo?

New Fortress Energy's FLNG asset is scheduled to load its first partial LNG cargo on Friday, August 9th, onto the Energos Princess.

Where is New Fortress Energy's initial FLNG asset located?

New Fortress Energy's initial FLNG asset is located offshore Altamira, Mexico.

When is NFE's FLNG asset expected to reach full production?

NFE's FLNG asset is expected to reach full production later in August 2024, after a brief scheduled maintenance outage following the first cargo load.

What is the significance of this FLNG milestone for New Fortress Energy (NFE)?

This milestone reinforces NFE's position as a leading vertically integrated gas to power company, allowing them to supply customers with their own LNG and provide an end-to-end energy solution.