New Fortress Energy LLC announced that its Puerto Rico subsidiary, NFEnergía LLC, has entered into a contract with the Puerto Rico Electric Power Authority for the supply of natural gas and conversion of Units 5 and 6 of the San Juan Combined Cycle Power Plant.
The initial term of the
contract is five years, with options for PREPA to extend for three additional
PREPA estimates that the
conversion of these units from diesel to natural gas will generate an estimated
$750 million in fuel cost savings over five years for the public power utility
and significantly reduce emissions.
“This is a very pivotal
transaction for PREPA and Puerto Rico,” said Wes Edens, CEO of New Fortress.
“The conversion of San Juan
Units 5 and 6 to natural gas will save hundreds of millions of dollars and
accelerate the modernization of critical power infrastructure,” he said.
“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,” he added.
After multiple conversion
attempts over the past 10 years, PREPA launched a competitive request for
proposal bid process (RFP #81412) in July 2018 for the supply of fuel and the
conversion of San Juan Power Plant’s Units 5 and 6.
NFEnergía’s bid was selected
based on fourteen grading criteria, which included experience and capacity,
approach and methodology, and price.
“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”, said PREPA CEO José Ortiz.
“The contract has been approved
by the Puerto Rico Energy Bureau and the Financial Oversight and Management
Board for Puerto Rico,” he said.
NFEnergía will supply natural
gas to the power plant from its micro fuel handling facility in the Port of San
Juan, which has been under development for more than a year. The facility is
being constructed with multiple truck loading bays to provide liquefied natural
gas to on-island industrial customers and microgrids.
The conversion of San Juan
Units 5 and 6 and the development of the micro fuel handling facility are
anticipated to be complete by mid-2019.