CBR
search

New Fortress share price spikes as company pays to escape LNG contract

Shares of the NASDAQ-listed company New Fortress Energy LLC surged more than 21 per cent Tuesday morning on the news that it will terminate existing LNG contracts with Centrica LNG Co. Ltd. for the rest of 2020 in exchange for US$105 million.

Share prices closed at US$15.75 on Tuesday following the announcement. It closed on Thursday at US$16.92.

The new deal will enable New Fortress to purchase LNG in the open market at much lower prices than agreed before with Centrica which is based in the UK.

The company has facilities in Puerto Rico and Jamaica, and is striving to reach target margins from committed volumes of more than US$400 million on an annualised basis during the third quarter of 2020.
The company is also working on projects in Mexico and Nicaragua with the goal of having both projects completed by the end of the year 2020.

New Fortress Energy CEO Wes Edens

Those operations should contribute an additional $150 million toward that operating margin goal, it said.

Company CEO Wes Edens said the company is planning to bring four to eight projects into service in 2021.

The company is developing a project with the LNG being produced in northeast Pennsylvania. The LNG will then be moved 200 miles by rail to a marine transport terminal on the Delaware River in New Jersey.