US-listed Excelerate Energy is making a major expansion on downstream LNG by paying over $1bn to hoover up New Fortress Energy’s LNG assets in Jamaica.
Excelerate said it is paying $1.055bn in cash for the Jamaica business.
These include the regasification and LNG storage and distribution facilities of the Montego Bay and Old Harbour LNG terminals, the Calendon 100 MW combined heat and power co-generation plant and all associate operation, pipelines and infrastructure.
Exclerate said it intends to fund the transaction using a combination of permanent financing and cash on hand. Excelerate has backstopped the financing with an $850m fully committed bridge facility.
The company expects the transaction to close in the second quarter of 2025.
In March, New Fortress chairman and chief executive Wes Edens highlighted its assets in Jamaica as one of the sell-off possibilities for the company.
New Fortress was instrumental in bringing LNG to Jamaica in 2016
Edens said: “We are proud of the contributions we have made to Jamaica’s energy transition. This transaction with Excelerate is a meaningful step as we continue to streamline our operations.
“We are confident that Excelerate will continue to drive meaningful progress for Jamaica’s energy future.”
Excelerate, which has long been referencing its plans to grow out along the LNG value chain, said the ownership of acquired terminals and downstream infrastructure will enhance long-term contract revenue and margins, diversify its geographic exposure and customer base and secure “pull through demand” for its LNG supply portfolio.
It also flagged up potential growth opportunities from the acquisition, including the development of the infrastructure for LNG bunkering, particularly for the cruise and container ships calling in the Caribbean.
Excelerate president and chief executive 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.”
Kobos said the deal will provide predictable long-term cash flows at stable margins with a weighted average remaining contract duration of about 21 years, including contract extensions.
He added: “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.”(Copyright)
