New Fortress Energy extends partnership with PREPA
Genera modifies its long-term operations agreement to reduce costs.
New Fortress Energy Inc. (NFE) has announced a one-year extension of its 80 Tera British thermal units (TBtu) gas supply contract with the Puerto Rico Electric Power Authority (PREPA). The extension aims to strengthen Puerto Rico’s energy infrastructure by ensuring a stable and cleaner energy source.
Alongside the gas supply extension, NFE’s subsidiary, Genera, has modified its existing 10-year operation and maintenance agreement with PREPA. Under the revised contract, future incentive payments have been eliminated in exchange for a one-time payment of $110 million, News is my Business previously reported. According to NFE, this adjustment is intended to streamline operations and lower energy costs across the island.
“Optimizing our existing contract allows us to accelerate the delivery of cleaner, more affordable energy while achieving meaningful cost savings and environmental benefits for the people of Puerto Rico,” said Wes Edens, chairman and CEO of New Fortress Energy.
The extended gas supply contract is expected to facilitate the conversion of older diesel power plants to natural gas. These conversions are projected to generate significant cost savings while reducing emissions, aligning with Puerto Rico’s broader strategy for a more sustainable energy system.
NFE has played a role in Puerto Rico’s energy sector since 2017, initially entering the market to address the island’s “urgent need for natural gas and power,” the company said.
In 2023, NFE constructed emergency power plants in San Juan and Palo Seco in response to a U.S. Army Corps of Engineers initiative aimed at stabilizing Puerto Rico’s power grid. These plants have since become key components of the island’s energy infrastructure, supplying critical baseload power.
In March 2024, NFE sold the emergency power plants to PREPA for $373 million. NFE said the transaction underscored the company’s commitment to Puerto Rico’s energy security while reducing long-term costs.
Following the sale, NFE was awarded an 80 TBtu island-wide gas supply contract through a competitive bidding process, effectively doubling the volume of gas it supplies to the island.
The collaboration between NFE and PREPA reflects a shared goal of “delivering reliable, clean power to Puerto Rico at the lowest possible cost.” Both entities said that “by optimizing existing contracts and investing in infrastructure improvements, both entities aim to provide sustainable energy solutions that benefit the island’s residents and economy.”
