US firm New Fortress Energy has inked a 7-year LNG supply deal with the Puerto Rico Public-Private Partnerships Authority (P3A) and the Third-Party Procurement Office (3PPO), the company announced on September 16.

The agreement has yet to be finalized as it is currently under review by the Financial Oversight and Management Board of Puerto Rico.

“We have had discussions on long term fuel supply since April with the Government of Puerto Rico and are pleased to have reached an agreement,” Wes Edens, Chairman and CEO of New Fortress Energy said in a statement.

The contract also provides for incremental volumes of the super-chilled fuel to be delivered. For Puerto Rico, this option will allow for plants currently burning diesel to convert to burning gas, which is expected to save the territory significantly in its energy costs, while also using a cleaner burning fuel that produces less emissions.

Under the terms of the deal, up to 75 trillion British thermal units (TBtu) of natural gas per year can be supplied through the agreement. The minimum annual take-or-pay volume has been set at 40 TBtu but can rise to 50 TBtu depending on conditions met.

Pricing was agreed at 115% of Henry Hub plus $7.95 per million British Thermal units (MMBtu). However, pricing for San Juan 5 & 6 units will be 115% plus $6.50 per MMBtu.

The LNG will be supplied by New Fortress’ 1.4mn tonnes per year (tpy) Fast LNG plant situated offshore Altamira, Mexico. The Fast LNG facility began commercial operation in late 2024, and is now producing LNG above its nameplate capacity.

“Matching our LNG production with long term offtake has always been our goal. This locks in sustainable long-term margins for NFE and provides a foundation of financial stability for our company,” Chris Guinta, CFO of New Fortress Energy said in a statement.

The contract is in addition to the 25-year supply deal New Fortress holds with the territory’s Energiza power plant and the new 550-MW power plant Puerto Rico is developing.

The agreement also comes after months of tense negotiations over the renewal of a 15-year LNG supply deal estimated to be worth $20bn, with New Fortress also withholding an LNG cargo shipment earlier in July over a payment dispute between the two parties.