Puerto Rico Energy Czar Defends New Fortress LNG Supply Deal

(Bloomberg) -- The official in charge of addressing Puerto Rico’s power crisis is pushing to move forward with New Fortress Energy Inc.’s proposed $20 billion contract to supply the island with natural gas, saying a federal watchdog’s concerns about the deal are overwrought.

Josue Colón, Puerto Rico’s energy czar, said the Financial Oversight and Management Board’s worry that the 15-year contract would give New Fortress Energy a near-monopoly ignores the fact that the company already controls one of the island’s few liquefied natural gas import terminals.

“That exclusivity was created under a contract that the oversight board approved in 2018 when it gave New Fortress exclusivity over the only port in the northern area where natural gas can be brought in,” Colon said during a press conference late Thursday. “Those preexisting conditions are not this administration’s responsibility.”

Shares of New Fortress rose as much as 20% midday Friday.

New Fortress’ contract was due to expire in June but has since been extended on a temporary basis. A spokesperson for the company declined to comment, citing pending contract negotiations.

A spokesperson for the Oversight Board said that because the value of the 2018 deal was less than $10 million, it didn’t meet the threshold for board review. 

Governor Jenniffer González-Colón confirmed ongoing negotiations with New Fortress Energy, government officials and the oversight board regarding the LNG deal, which she described as critical for energy stability.  

“I also have my reservations,” she said of the deal, noting the magnitude of the project. “But this is a process that’s still alive.”

While the board has oversight on the contract, the Puerto Rican government has in the past pursued legal action to override board decisions. 

(Updates with details on board oversight and share price starting in eighth paragraph.)

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