Why New Fortress Energy sold its stake in a Brazilian power plant

New Fortress Energy (NFE) has signed a 6.1bn-real (US$1.28bn) contract with Brazil’s Eneva to sell its stake in the Porto de Sergipe thermoelectric plant (pictured) in Sergipe state, the company announced on Wednesday. 

As part of the transaction, Eneva has agreed to acquire 100% of the shares of Centrais Elétricas de Sergipe Participações (Celsepar), which holds all of the rights to expand the Sergipe plant, with an additional pipeline of 3.2GW of expansion projects. 

Eneva will assume the 4.1bn-real current debt of Centrais Elétricas de Sergipe (Celse), a fully-owned subsidiary of Celsepar. With the amount disbursed added to the debt, the value of the acquired company totals 10.2bn reais.

Located in Barra dos Coqueiros in the country’s northeast region, the 1,593MW project is supplied by NFE’s Golar Nanook floating storage and regasification unit (FSRU), which will remain chartered to Celse for 20 years. 

Leandro Cunha, vice president of new business development at NFE in Brazil, explained that the Celse divestment is part of a global capital allocation strategy that is intended to support New Fortress' growth in Brazil and worldwide.

And he assured that the company has a long-term commitment to Brazil and remains focused on its existing business in the country.

“The Brazilian operation is an important part of the company's global portfolio, and the company is constantly evaluating new investment opportunities in Brazil,” Cunha told BNamericas. 

The executive highlighted that the construction of the São Francisco do Sul and Barcarena liquefied natural gas (LNG) regasification terminals, in Santa Catarina (Terminal Gas Sul) and Pará (Barcarena) states, respectively, remain on schedule.

He added that NFE continues to operate the Golar Nanook normally, as well as its natural gas and biomethane plants, LNG regasification units and small-scale operations in five Brazilian states.

One of the largest thermoelectric plants in Latin America, Porto de Sergipe plays a key role in energy security in northeast Brazil, since its capacity is equivalent to 15% of the region's energy demand. The unit is fully contracted in the regulated environment until December 2044.

"The acquisition of Celse is a strategic move for Eneva to leverage competencies and further diversify our business model in line with our strategic ambitions for 2030. This way, we will be increasingly consolidated as one of the largest private energy suppliers for the country and as a key player in Brazil's energy transition," Eneva CEO Pedro Zinner said in a statement. 

The company currently operates 11 natural gas fields in the Parnaíba and Amazonas basins, output from which is used to supply its thermoelectric generation park in Maranhão and Roraima states, respectively. 

The combination of Eneva's assets after this acquisition will result in total installed capacity of approximately 6GW. 

According to the company, this is a key step towards having its first gas hub infrastructure, including a pipeline and port to enable the commercialization and flow of gas.

The acquisition also ensures Eneva access to imported gas and infrastructure with spare capacity that allows flexible and reliable supply management, further contributing to the expansion of its product commercialization segment.