New Fortress’ Puerto Rico Gas Cargoes at Risk Amid Dispute
(Bloomberg) -- New Fortress Energy has reached a tentative deal that may allow it to deliver liquefied natural gas to its terminal in Puerto Rico after it hammered out an agreement with tugboat operators, local media reported.
During a hearing Tuesday, the court agreed to let the New York-based company use lower-capacity tugboats to bring its LNG cargoes into the terminal, depending on certain conditions, El Nuevo Dia reported.
New Fortress didn’t immediately respond to a request for comment on the temporary agreement.
Last month, US District Judge Silvia Carreño-Coll issued a temporary order requiring billionaire Wes Edens’ company to use larger-capacity tugboats, after a group of marine pilots filed a lawsuit alleging the vessels used by the company were unsafe.
According to New Fortress’ appeal of the order, the tugs requested by the pilots are not available in the port and complying with the injunction could cause “catastrophic consequences for Puerto Rico’s energy supply.”
The showdown has caused disruptions in the US territory. New Fortress subsidiary Genera PR, which manages most of the island’s generation, said two of its larger power plants, which usually run on LNG, are now operating exclusively on diesel. The breakdown caught the attention of Governor Jenniffer González Colón. “It’s an outrage that the people of Puerto Rico have to suffer due to a private dispute,” she said last week.
New Fortress’ share price has plunged almost 75% over the past year, as the company’s debts have mounted.
The government and the company recently signed a seven-year, $4 billion deal to supply power plants with LNG, but the contract still requires approval from the federal oversight board, which has been in the crosshairs of the White House.
New Fortress’ terminal in San Juan last received an LNG cargo on Sept. 20, according to shiptracking data compiled by Bloomberg. As of Tuesday, two of New Fortress’ LNG tankers have stayed in place — the Energos Maria is in port at San Juan, while the Energos Princess remains outside the port.
“Safety is our top priority across all operations, and our track record demonstrates this commitment,” a New Fortress spokesperson said in a statement earlier Tuesday. “We have safely delivered nearly 1,000 shipments of LNG in our history without a single safety incident.”
(Updates with tentative deal from first paragraph. A previous version of this story corrected the spelling of Edens.)
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