US-based New Fortress Energy has formed a new liquefied natural gas (LNG) joint venture with private equity firm Apollo and sold 11 of its owned vessels to a newly formed JV in a deal worth around $2bn.
The Nasdaq-listed New Fortress, led by billionaire Wes Edens, will receive $1.1bn in proceeds from the sale of six floating storage and regasification units (FSRUs), two LNG carriers, and three floating storage units (FSUs) to the JV in which it will own a 20% stake. The proceeds are expected to be used to fund the company’s floating liquified natural gas (FLNG) projects, as well as for ongoing downstream infrastructure and general corporate purposes.
As part of the deal, New Fortress will charter 10 of the 11 vessels for up to 20 years, commencing either upon the close of the transaction, which is expected to take place in the third quarter of this year, or upon the expiration of the vessels’ existing third-party charters.
The JV partners said the move would create a global marine infrastructure platform that provides critical infrastructure for the delivery, storage, and regasification of LNG to power countries around the world, which can reduce their reliance on oil and coal to lower carbon emissions while enabling potentially substantial cost savings.
“Together with Apollo, we are creating a leading LNG marine infrastructure platform to help accelerate the energy transition while freeing up capital to continue to invest into our Fast LNG and downstream LNG projects worldwide,” said Edens, chairman and CEO of New Fortress Energy.
“Energy transition and energy reliability are global priorities and core to Apollo’s sustainable investing platform. This is a high-quality portfolio that increases energy security around the world, accelerates decarbonization efforts, and facilitates LNG use which is cleaner and more affordable than diesel,” added Apollo partner Brad Fierstein.
