Texas, NFE, Floating Natural Gas Liquefaction Solution -- Motley Fool And Reader Update -- March 16, 2021

From Motley Fool today:

Shares of New Fortress Energy rallied more than 27% by 3 p.m. EDT, today, Tuesday, March 16, 2021. 

Fueling the energy infrastructure stock was its fourth-quarter results and an analyst upgrade. So what New Fortress Energy reported slightly weaker-than-expected fourth-quarter results as the energy infrastructure company broke even, while analysts expected a $0.04 per share profit. 

However, the market overlooked that miss because of the company's optimistic outlook. 

New Fortress Energy noted that it has now announced three separate growth transactions valued at $5.1 billion. These include the previously announced Hygo Energy Transition and Golar Energy Partners  acquisitions from Golar LNG. 

It's also developing the Suape Terminal and announced a final investment decision on a floating natural gas liquefaction solution, Fast LNG. It expects that project to be operational by the end of next year. 

Those moves led Stifel to upgrade the stock from hold to buy, setting a $50 price target (though that's now $4 below the current stock price). While Stifel warns that "execution risk is still a challenge," the company has several catalysts on the horizon, making its value proposition "compelling." 

For the story on NFE and the Suape Terminal, see this press release. Wiki entry for Suape Port, Brazil, is here. FAST LNG press release here.

A reader has been following this story for quite some time, and sent me the following today:

Long story short, NFE has purchased two jack up drill rigs - originally costing $500 million  each -  for $30 million per. 

They are heading to a Texas shipyard where a  1.4 million tonne per year (mtpa) modular LNG train will be placed onboard each. See story here.

Rigs will then be towed to a shallow water gas field (not yet picked, but likely shallow water GOM), and rig will drill new gas wells, liquefy natgas  onboard, send it to adjacent LNG ship used as storage, and product will be offloaded and delivered via standard LNG ship.

Brilliantly simplistic.

Using the Australian Prelude for comparison (not a complete apples-to-apples comp, but close), Prelude cost ~$15 billion, produces 3.6 mtpa, and took over a decade to get online. 

On the other hand, NFE's units will cost $500 million each, produce 1.4 mtpa, and be ready by next year (2022). 

They figure the overall cost to them for the LNG will be about $3.50/mmbtu, which is about half price of LNG selling point right now.

Much more could be said, not least being the potential for  setting these floating plants offshore smaller, out of the way gas fields worldwide and producing cheap LNG for growing, local markets. 

Vietnam, Indonesia and the Philippines are especially promising markets.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.  

Back in 2016, liquefaction LNG export terminals were a big deal. A list of proposed terminals was posted here. 

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Meanwhile, Delaware River Basin Commission -- The Gibbstown Dock
From: Wyalusing, Bradford County, Pennsylvania
To: Gibbstown, New Jersey

Link here. 

The Delaware River Basin Commission (DRBC) voted on Wednesday to approve a permit for construction of Delaware River Partners LLC's controversial marine terminal in Gibbstown, New Jersey, that will be capable of exporting liquefied natural gas (LNG).

The proposal is to transport LNG via truck or train to the Gibbstown dock from a plant that New Fortress Energy Inc is developing in Wyalusing in Bradford County, Pennsylvania, that would liquefy natural gas from the Marcellus Shale.

The LNG would then be exported by ship from the Gibbstown terminal to customers in the Caribbean and elsewhere.