Based on Hunterbrook Media’s reporting, Hunterbrook Capital is short $NFE at the time of publication. Positions may change at any time. See full disclosures below.
New Fortress Energy Inc.’s (NASDAQ: $NFE) floating gas unit in the Gulf of Mexico, Altamira Fast LNG 1, has seemingly yet to make a shipment of liquified natural gas, according to Hunterbrook Media analysis of automatic identification system shipping data and satellite imagery. This appears to indicate the company missed its April deadline for sending its first cargo.
Satellite imagery from December 2023 to May 5 obtained by Hunterbrook Media reflecting New Fortress’ rigs and floating storage unit. If a shipment were to occur, another vessel designed to transport the liquified natural gas to market would appear next to the green ship in the center of the .gif — the gas storage vessel — for loading.
Altamira was initially slated to be online in 2023. New Fortress is set to report its first-quarter earnings May 8.
Pictures shared on social media on April 26 showed an incident on board a New Fortress vessel designed to chill and pressurize the gas to convert it into liquid form. The company said it was a “minor mechanical issue … [with] no serious injuries” and that it was “not expected to have an impact on our timeline to begin production of LNG,” according to a statement posted by analyst Sergio Chapa of oil and gas and maritime consultant firm Poten & Partners.
NFE Pioneer II incident posted on Offshore Life México’s Facebook page. The company said it was a result of commissioning its “cold box,” which surrounds the cooling equipment. It is unclear what the white substance on the ship’s hull and deck area are but specialists and comments cited by shipping publications TradeWinds and LNG Prime theorize it could be insulation.
The company did not return Hunterbrook Media’s request for comment.
Mexican state official José Ramón Silva said the company confirmed the facility would be exporting gas by the end of the month, according to May 4 reporting by El Sol de Tampico, a website run by the Mexican media company Organización Editorial Mexicana. Ramón Silva did not return Hunterbrook Media’s message on LinkedIn.
Floating facilities like Altamira are not widely adopted
Only 3% of the world’s supply of liquified natural gas comes from offshore facilities like the one New Fortress is building in the Gulf off the coast of Mexico. New Fortress hopes it can develop more projects like Altamira despite cutting back their growth plans for floating liquefaction facilities by more than 70% from 2022 to 2023.
New Fortress bills Altamira as a part of its “Fast LNG” suite of projects — claiming that this is the “fastest LNG installation in the history of the planet,” according to New Fortress CEO Wes Edens.
New Fortress advertises that it can bring a project online in 18 to 20 months, faster than onshore liquefaction facilities more common in the sector, which New Fortress says take an average of 60 months to build.
However, NFE said that it reached its final investment decision on its first Fast LNG project in Louisiana in January 2021. With no Fast LNG project online yet, that’s more than 40 months.
By comparison, Venture Global LNG Inc. announced its final investment decision for its U.S. onshore facility Calcasieu Pass in August 2019 and loaded its first cargo in March 2022. That’s 31 months. It has been 17 months from the time New Fortress first announced a deal related to Altamira to the present.
Clark Williams-Derry at the Institute for Energy Economics and Financial Analysis, who watches international LNG markets closely, told Hunterbrook Media, “This project shows that New Fortress’ penchant for trying to evade regulators doesn’t always result in a faster process.”
“We saw it in Puerto Rico, New Jersey, and Pennsylvania — New Fortress seems to design their projects in a careful way to skirt regulators. By shifting their focus from a Fast LNG facility in Louisiana to Mexico, New Fortress was able to avoid some U.S. environmental and trade laws, including the Jones Act. It’s a business model based on being faster than others — not necessarily through better technology, but just taking regulatory shortcuts. But I am not sure if it’s working. They keep getting called out. They launch projects quickly, but regulators eventually catch up,” Williams-Derry said.
New Fortress is a liquified natural gas company that operates primarily in Latin American markets.
Daniel Sherwood contributed reporting. Sherwood joined Hunterbrook from The Capitol Forum, a premium subscription financial publication, where he was an Editor & Senior Correspondent, writing and managing market-moving investigative reports and building the Upstream database. Prior to The Capitol Forum, Daniel has experience conducting undercover investigations into fossil fuel companies and other research. He also served as an Honors Law Clerk in the Criminal Enforcement Division of the EPA. He has a JD from Michigan State University. Daniel is based in Michigan.
Sam Koppelman is a New York Times best-selling author who has written books with former United States Attorney General Eric Holder and former United States Acting Solicitor General Neal Katyal. He helped build Fenway Strategies into one of the preeminent strategic communications firms in the country—with side quests speechwriting for Michael Bloomberg, running the surrogate remarks operation on the Biden-Harris campaign, and co-founding Mayday, which is now one of the leading information providers on how to access reproductive health care in states with bans. Sam has published in the New York Times, Washington Post, Boston Globe, Time Magazine, and other outlets — and occasionally volunteers on a fire speech for a good cause. He has a BA in Government from Harvard, where he was named a John Harvard Scholar and wrote op-eds like “Shut Down Harvard Football,” which he tells us were great for his social life.