U.S. energy company New Fortress Energy (NFE) has entered into an agreement with Mexican state-owned electric utility Comisión Federal de Electricidad (CFE) to build an offshore LNG hub near Altamira.

On 5 July, New Fortress Energy revealed that it has entered into an agreement with CFE as part of a growing strategic alliance. The alliance is supported by Andrés Manuel López Obrador, the president of Mexico, and by Manuel Bartlett, the CEO of CFE.

The agreement involves expanding and extending NFE’s supply of natural gas to multiple CFE power generation facilities in Baja California Sur.

In addition, it includes creating a new LNG hub off the coast of Altamira, Tamaulipas, with CFE supplying the requisite feedgas to two NFE FLNG units using CFE’s existing pipeline capacity.

“We are pleased to expand our strategic alliance with CFE, which will enhance clean energy security for Mexico and enable the construction of a new LNG hub off the coast of Altamira,” said Wes Edens, CEO of NFE.

Baja California Sur

In July 2021, NFE started commercial operations of an LNG regasification terminal in the port of Pichilingue, La Paz, Baja California Sur.

The terminal, which features NFE’s ISOFlex system, is optimally positioned to supply natural gas to CFE’s generation facilities.

Pursuant to the agreement, CFE and NFE will extend the term of NFE’s gas supply agreement to CFE’s power generation facilities in the region and increase the volume of delivered natural gas under mutually agreeable terms.

Additionally, NFE has agreed to sell its own 135-megawatt power plant in La Paz to CFE. The addition of this power plant to CFE’s generation fleet is expected to enhance system reliability, reduce power costs, and complement steps CFE is taking to expand the use of renewable energy resources and lower emissions in the region.

Altamira LNG Hub

NFE and CFE plan to collaborate on the creation of a new LNG hub off the coast of Altamira, Tamaulipas.

Pursuant to the agreement, NFE will deploy multiple FLNG units of 1.4 million tonnes per annum (mtpa) each that use CFE’s existing firm pipeline transportation capacity to deliver feedgas volumes to NFE.

As part of the agreement, CFE would share in the production and marketing of a portion of the LNG volumes from the new Altamira offshore LNG hub.

The transactions are subject to customary terms and conditions and finalisation of related agreements.

Source: Offshore Energy