New Fortress’ 2nd Tamaulipas LNG project could cost US$2.5bn

US company New Fortress Energy’s second LNG export facility in Mexico’s Tamaulipas state could involve two 1.4Mt/y onshore liquefaction train systems at Altamira port, which would require a total investment of US$2.5bn.

“We are looking to put a unit onshore on Altamira and have a positive reaction and interaction with the Mexicans,” CFO Christopher Guinta told analysts during an earnings call Wednesday, adding capacity and capex estimates. 

The company is about to put two offshore 1.4Mt/y liquefaction systems off Altamira, called FLNG1, for which work started in March 2021. However, it disclosed last week that it was mulling adding an onshore export facility, dubbed FLNG2, which caused the US Department of Energy (DOE) to request clarification because expanding onshore would involve a separate permit. 

“We have resolved the issue … They have agreed with us, so it is a non-event for us now,” Guinta said.  

“Right now we are only focusing on the first one being deployed in Altamira offshore and we are evaluating where we would put additional units. As we discussed previously, we have permitting sites in Mexico offshore, which is the one permitted now, per two trains, we are looking to permit for up to two trains in the onshore location and we are also permitting two trains at the Louisiana location,” he added. 

The FLNG1 project, involving a US$1.3bn first stage, is a public-private partnership between the firm and Mexico’s federal power utility CFE and is set to become the first LNG project in the country's portfolio to come online this year. 

Executives expect to conclude the project’s commissioning by December, following a few delays. 

“Over the last 60 days, the remaining two rigs have moved from their construction site in Corpus Christi to their permanent home in Altamira. All three rigs have been jacked up into position, connected to one another and hooked up to the subsea pipeline,” Guinta said, adding that “we expect to see the first drops of LNG in the next few weeks.”

In September, NFE brought online the 135MW La Paz power plant in Baja California Sur state. The company will now advance the asset’s sale to the Mexican government. 

“We have an agreement to sell the plant to CFE in 2024, but NFE will continue to own the terminal until then and supply gas to the power plant until the sale closes. In the meantime, NFE retains the cashloads related to generating power and selling it to the local market,” Guinta said.