New Fortress pushes first LNG delivery from Altamira project offshore Mexico to August

New Fortress delayed its target for delivering the first LNG cargo from its floating Altamira export terminal until August, the company said July 23, just days after announcing the facility offshore northern Mexico had begun LNG production(opens in a new tab).

Following the delivery of the first cargo, New Fortress said the facility will "enter full production thereafter."

The company's announcement came as an LNG tanker that departed the facility June 20 was underway in the Caribbean, raising questions about whether it was carrying the first commissioning cargo from the 1.4 million mt/year Altamira facility.

New Fortress did not respond to multiple requests for comment.

The first shipment from Altamira will be Mexico's first LNG export.

New Fortress on July 19 announced that the Altamira project had started LNG production, but the announcement did not specify when New Fortress achieved that milestone or provide a timeframe for the first export.

The announcement also made no mention of loading a cargo, although New Fortress had said in mid-June it expected to deliver the first cargo from the facility in July.

The tanker(opens in a new tab) that was underway in the Caribbean, the Energos Princess, was listed for orders, according to S&P Global Commodities at Sea(opens in a new tab) data. The departure of the vessel followed a ship-to-ship LNG transfer operation lasting 21 hours at the NFE Penguin, which is the storage vessel of the terminal used to transfer LNG to tankers for export.

But the shipping data also showed the draughts of the Energos Princess and the NFE Penguin had changed little, and the vessels were listed as ballast.

Both vessels are under charter to New Fortress.

New Fortress has described supply from project as earmarked for Puerto Rico in the short to intermediate term, where the volumes could be used as fuel for power generation.

An Atlantic-based LNG trader said New Fortress' LNG import facility in Puerto Rico is the likely destination for the first cargo from the project. LNG production from Altamira will likely supply New Fortress Energy's own portfolio and demand for now, the source said.

The company's existing LNG import facilities, including in Mexico, would be potential markets for future production from Altamira, according to the source. The terminal New Fortress is developing in Nicaragua, last expected to begin operations this year, could also be a potential market, the source said.

New Fortress' downstream facilities stand to be important outlets for Altamira LNG volumes because the project is among those caught up in the US Department of Energy's "pause" on issuing key new export licenses, announced in January. The permits subject to the pause allow LNG exports to countries that lack free trade agreements with the US, representing most of the global LNG import market.

The Altamira project needs the approval because it relies on feedgas supply from the US. The export facility sources feedgas by using some of Mexican government-owned utility CFE's underutilized firm pipeline transportation capacity on the 2.6 Bcf/d Sur de Texas-Tuxpan marine pipeline operated by TC Energy.

The US has free trade agreements in place with Mexico and with Nicaragua.

New Fortress is also able to sell LNG from Altamira to Puerto Rico because it has a ruling in hand from US Customs and Border Protection finding that LNG produced at the facility will be a "new and different product" from the US-sourced pipeline feedgas. That means the LNG can be delivered back to the US without violating the 1920 Jones Act, a law that otherwise restricts shipments of US LNG between US ports.

Altamira LNG is the first of what New Fortress calls its Fast LNG, or FLNG, units, pitched as a way to meet global demand for LNG on a faster timeline than it typically takes to build new onshore LNG export capacity. New Fortress has delayed its timeline for bringing the terminal onstream multiple times, having targeted the start of exports by the end of 2023.

In New Fortress' statement disclosing its latest timeline for the first LNG delivery, the company said it closed a previously announced $700 million loan for its second FLNG unit.

New Fortress said it will develop the second FLNG unit in partnership with CFE, using an in-place terminal onshore Altamira, Tamaulipas state, Mexico. The company said it plans to incorporate the same modular technology as the first unit and expects to complete construction in the first half of 2026.

"Our FLNG complex is advancing at a rapid pace as we have now produced LNG at our first unit, and fully financed our second," New Fortress CEO Wes Edens said in a statement. "These are large infrastructure projects that add considerable financial and operational value to our Company and we are thrilled with the progress to date."

The Platts Gulf Coast Marker for US FOB cargoes loading 30-60 days forward was assessed at $8.98/MMBtu July 23, down 24 cents from July 22.