Excelerate Energy, a US-based liquefied natural gas (LNG) firm, has signed an all-cash deal to acquire New Fortress Energy’s (NFE) business operations in Jamaica for $1.055bn.
This acquisition involves taking over the Montego Bay LNG Terminal and the offshore floating storage and regasification terminal at Old Harbour. It also includes a 150MW combined heat and power (CHP) co-generation facility at Clarendon, along with the associated infrastructure of the assets.
The two midstream assets in the deal are Jamaica’s only two LNG terminals. Both are crucial for supplying power plants and industrial customers.
The Clarendon facility is also the country’s only combined heat and power co-generation plant.
Excelerate Energy is set to assume all existing material contracts as part of the deal.
The LNG company has highlighted that this acquisition will enhance its downstream capabilities and diversify its portfolio by adding “last-mile” infrastructure. The deal positions Excelerate Energy as Jamaica’s sole LNG platform, capitalising on years of invested capital and its history of serving industrial clients and the Jamaica Power System.
Excelerate Energy said that the acquisition bolsters its competitive stance. It also broadens its geographic reach and operational exposure within the Atlantic basin, a market with close proximity to US Gulf Coast LNG supply sources.
Furthermore, Excelerate Energy’s 20-year supply deal with Venture Global LNG aligns with the contract terms of the Jamaican assets, which include an approximately 13-year weighted average contract length or 21-year average with extensions.
The acquisition also opens up opportunities for expansion within Jamaica. There is potential for providing LNG bunkering services in this high-traffic region, meeting the increasing demand from container and cruise vessels in the Caribbean.
Additionally, plans to expand the Clarendon CHP plant could double its generation capacity, addressing anticipated electricity demand growth in Jamaica. Incremental gas supply is expected to support Jamaica’s industrial sector as it moves away from oil reliance.
Excelerate Energy president and CEO Steven Kobos said: “This transaction represents an important milestone in the execution of Excelerate’s downstream growth strategy. It will expand and diversify our platform, while positioning Excelerate as the key provider of essential LNG import infrastructure in a desirable and growing Atlantic basin natural gas market.
“These assets complement our existing operational expertise and our long-term LNG supply agreements, while offering the potential for future growth opportunities as natural gas becomes an increasingly essential part of Jamaica’s energy mix.”
The boards of directors of both Excelerate Energy and NFE have unanimously approved the transaction, which is slated to conclude by Q2 2025 following regulatory approvals and customary closing conditions.
Evercore is acting as financial adviser, while Gibson, Dunn & Crutcher serves as legal advisor to Excelerate Energy.
For NFE, the proceeds from this transaction will be utilised to reduce corporate debt and for general corporate purposes. Intrepid Financial Partners served as financial advisor to NFE, with Vinson & Elkins as legal counsel.
New Fortress Energy chairman and CEO Wes Edens said: “This transaction with Excelerate is a meaningful step as we continue to streamline our operations.
“We are proud of the contributions we have made to Jamaica’s energy transition. Our Jamaican assets and employees are world-class and have played a significant role in improving both the cost and reliability of energy on the island, and we are confident that Excelerate will continue to drive meaningful progress for Jamaica’s energy future.”
