New Fortress Energy posts record LNG production in Q3

US-based New Fortress Energy reduced its Q3 loss to US$36.7mn, down from US$167mn in the second quarter, while upping its operating margin by 238% to US$51.4mn.

The company also increased its LNG production volumes to record levels, averaging 1.8 million gallons per day (241,000f3/d) during September, a 55% increase over June production.

The increase was achieved by bringing online new boilers in its Jamalco plant in Jamaica and by hiking production volumes at its San Juan facility in Puerto Rico, the company said during its Q3 results presentation.

In terms of ongoing projects, the company expects to finish its La Paz LNG terminal by December this year, while the accompanying 135MW power plant is expected to be completed in the first quarter of 2021.

The company’s other ongoing project, a terminal in Puerto Sandino, Nicaragua, which is accompanied by a 300MW power plant, is expected to be finalized during the first half of 2021.

New Fortress also said it was developing nine potential new customers, with three of them expected to be operating by the end of the year and the rest during the first quarter of 2021.

Revenues were US$137mn, a 45% increase compared with the second quarter, while cash flow fell by 30% in the same period to US$153mn.

HYDROGEN

New Fortress has expressed growing interest in low-emissions hydrogen production and has innovative ideas about how to bring about widespread adoption.

Specifically, the firm believes that, instead of focusing on producing hydrogen with clean energy, the focus should be on whether the entire process produces zero net emissions. 

This would allow clean hydrogen to be produced cheaply, for example through coal pyrolysis with a carbon capture component. Prices could go as low as US$0.20 per kilogram, 75% cheaper than hydrogen produced through electrolysis of water. The key would be to mitigate the emissions released by the procedure to ensure they net to zero.

CEO Wes Edens pointed out during the company’s third quarter results presentation that the worldwide market for hydrogen is already larger than that of LNG, with 100Bkg being consumed every year for a total value of US$125bn, 30% bigger than the global LNG market. However, most of it is produced through high-emission procedures.

“I think you’re going to hear an awful lot about this,” Edens said. “As odd as it may seem that the dirtiest of fossil fuels may create a real gateway to creating really, really clean hydrogen for us, I think it's got a lot of promise.”

He added the company was developing prototype projects and looking for a partner that could help it build and test it with the goal of evaluating opportunities for expansion into the hydrogen market.

“My intention is to try to find a technology, a process, a way to deal with the climate change issues in a very broad way, and you need to have scale to do so… If you can figure out a way to sequester [the CO2] economically, it opens the door for a huge amount of value,” Eden said.