Wedoany.com Report-Sept. 17, Puerto Rico has reached a $4 billion liquefied natural gas (LNG) supply agreement with New Fortress Energy (NFE.O), Governor Jenniffer Gonzalez announced on Tuesday through a post on social media. The contract follows the collapse of negotiations in July for a larger deal.

A LNG tank is pictured.

The revised terms shorten the agreement to seven years, compared with the original 15, while including an option for a three-year extension. Exclusivity clauses were removed, providing Puerto Rico with more flexibility in future energy procurement. Gonzalez highlighted that the arrangement secures more competitive LNG pricing, with certain premiums reduced.

Josue Colon, who was appointed earlier this year to lead the territory’s energy sector, commented: "This agreement contributes to the process of Puerto Rico's energy transition, reducing dependence on more polluting fossil fuels." The supply arrangement is still subject to approval by Puerto Rico’s Financial Oversight and Management Board.

New Fortress Energy released its own statement, noting that the contract could deliver up to 75 trillion British Thermal Units (TBtu) of LNG annually to Puerto Rico’s power system, with a minimum commitment of 40 TBtu per year under take-or-pay conditions. The company plans to source the shipments from a floating liquefaction facility in Altamira, Mexico, which began operations in 2023.

According to the agreed pricing structure, LNG volumes will be tied to 115% of the Henry Hub benchmark, with an added charge of either $6.50 or $7.95 per million Btu, depending on the delivery terms. NFE said the framework provides both stability and transparency in fuel costs over the contract’s duration.

Shares of New Fortress Energy rose 45% in Tuesday trading after the announcement, reflecting market confidence in the deal’s long-term impact on the company’s portfolio. NFE’s CEO Wes Edens stated: "Puerto Ricans pay far too much for electricity today and this long-term agreement provides cheaper and cleaner fuel for existing power plants for years to come."

The LNG supply is expected to support Puerto Rico’s existing generation facilities, while contributing to its broader energy transition goals. Officials have emphasized that securing diversified and cost-effective fuel sources is essential to stabilizing electricity prices and improving system reliability.

The contract underscores the growing role of LNG in Puerto Rico’s power sector. By eliminating exclusivity and reducing premiums, the revised agreement addresses concerns raised during earlier negotiations. The new terms are designed to provide economic benefits for consumers while ensuring long-term supply security.

Industry analysts note that Puerto Rico’s reliance on imported fuel makes agreements like this crucial for balancing affordability and sustainability. The partnership with New Fortress Energy is expected to strengthen Puerto Rico’s energy framework while creating conditions for future investment in cleaner energy solutions.