New Fortress Energy Inc. (NFE) expects its floating LNG (FLNG) platform offshore Altamira, Mexico to produce first volumes later this month after experiencing a mechanical issue in April.
NFE management in the first quarter earnings report said that the first cargo could be loaded at the liquefied natural gas facility in June. The company previously expected to achieve its first shipment in April.
CFO Chris Guinta confirmed reports of a late April malfunction with the facility’s cold box that resulted in some minor injuries and released perlite that was being used during system testing.
“The damage was isolated to one piping manifold within the box and is expected to be repaired by next weekend,” Guinta said. “This is why commissioning is so important and why we’ve invested in excellent partners that have been overwhelmingly supportive as we try to move through the balance of the commissioning work and produce LNG.”
Crews last summer began installing the floating modules offshore the state of Tamaulipas. Gas connections to existing infrastructure near the existing import terminal at Altamira were completed in November. The first phase of the export project consists of two trains, each with 1.4 million metric tons/year (mmty) of capacity, hoisted on jack-up rigs.
The FLNG units, and successive phases planned onshore, are to be supplied feed gas by the marketing arm of Mexico’s Comisión Federal de Electricidad (CFE), CFEnergía, from the Agua Dulce Hub in South Texas via the Valley Crossing pipeline. CFE transports volumes on the Sur de Texas-Tuxpan pipeline.
NGI’s forward fixed prices at Agua Dulce for June delivery were $1.927/MMBtu as of Wednesday, versus $2.120 for the summer balance. Summer 2025 prices were trading at $2.861. Agua Dulce basis prices were quoted 37.8 cents below Henry Hub for summer 2024, and 44.9 cents below the benchmark for summer 2025.
Once the facility is operational, NFE expects to begin selling cargoes to its existing customers in the Caribbean and South America.
Altamira is one of at least seven commercially advanced projects in the United States and Mexico with a pending application for a non-free trade agreement (FTA) permit impacted by the Department of Energy’s pause on new authorizations. That amounts to a combined 9.3 Bcf/d in export capacity under increased risk, according to an NGI review of pending projects.
Non-FTA permits are typically considered essential for large-scale export projects because of the flexibility in the customer base.
U.S. Customs and Border Protection issued a ruling that the transportation of LNG produced offshore Altamira by non-U.S. qualified vessels would not violate the Jones Act. This allows NFE to more easily ship volumes from the facility to U.S. territories such as Puerto Rico, or even the continental United States.
Along with Altamira, Mexico has 7.5 mmty of LNG capacity under construction, according to NGI’s North American LNG Project Tracker. Most of the facilities are expected to use U.S. feed gas.
NFE reported 1Q2024 net income of $56.7 million (26 cents/share), compared with net income of $151.6 million (72 cents) in the year-ago period.
