The US-based energy infrastructure company will hold a 20% stake in the new LNG maritime infrastructure JV, which will own six floating storage and regasification units, two LNG carriers, and three floating storage units
New Fortress Energy to form JV with Apollo for LNG maritime infrastructure. (Credit: djedj from Pixabay)
New Fortress Energy (NFE) has signed a deal to sell 11 liquefied natural gas (LNG) infrastructure vessels to a joint venture (JV) it will form with Apollo for a price of around $2bn.
As per the terms of the agreement, the US-based energy infrastructure company will have a 20% stake in the JV, while the remaining 80% will be held by Apollo.
New Fortress Energy will get proceeds of nearly $1.1bn after taking into account its share of the JV as well as paydown of existing debt. The company expects to use the proceeds from the sale to fund its FLNG projects and its ongoing downstream infrastructure and general corporate purposes.
The deal is expected to pave the way for a global marine infrastructure platform that will own six floating storage and regasification units (FSRUs), two LNG carriers, and three floating storage units (FSUs).
New Fortress Energy chairman and CEO Wes Edens said: “Together with Apollo, we are creating a leading LNG marine infrastructure platform to help accelerate the energy transition while freeing up capital to continue to invest into our Fast LNG and downstream LNG projects worldwide.
“We are pleased to be partnering with Apollo in creating a maritime infrastructure company that will help support NFE’s growing LNG infrastructure needs going forward.”
The vessels are underpinned by long-term contracts and are said to benefit from the LNG downstream operations and development activities of New Fortress Energy along with the investment and maritime experience of Apollo.
New Fortress Energy has also agreed to charter 10 of the 11 vessels from the JV. This will be for a 20-year period, which will begin from the date of closing of the deal or upon expiration of the existing third-party charter agreements of the vessels.
Additionally, the marine infrastructure platform will pursue growth opportunities in support of New Fortress Energy as well as third parties to help drive the energy transition and strengthen energy security globally.
Apollo partner Brad Fierstein said: “Energy transition and energy reliability are global priorities and core to Apollo’s sustainable investing platform. We’re pleased to further these initiatives through this long-term investment alongside our JV partners at New Fortress Energy.
“This is a high-quality portfolio that increases energy security around the world, accelerates decarbonisation efforts, and facilitates LNG use which is cleaner and more affordable than diesel.”
The deal, which is subject to certain regulatory approvals and third-party consents, is anticipated to close in Q3 2022.
In a separate development, New Fortress Energy has signed an agreement with Comisión Federal de Electricidad (CFE) for expanding supply of natural gas to Baja California Sur in Mexico as well as construct an offshore LNG hub near the Mexican port city of Altamira.