The global liquefied natural gas (LNG) market has a new player with the inauguration of a floating LNG export terminal offshore of Altamira, Mexico. Nasdaq-listed New Fortress Energy (NFE) has launched FLNG1, a floating terminal that represents a significant step forward for U.S. LNG exports.
Although the terminal is located in Mexican waters near Tampico, the natural gas originates from Texas. It is transported through the Valley Crossing Pipeline in Texas and then further south via the Sur de Texas-Tuxpan pipeline, where it is processed and liquefied. NFE’s innovative “Fast LNG” design allows for modular, standardized liquefaction units to be built on platforms. This offshore setup transfers the LNG to a floating storage unit (FSU), which is not only more cost-efficient but also safer and environmentally friendlier than traditional land-based storage. When ready for export, the LNG is transferred from the FSU to tankers for shipment.
The floating storage at Altamira is provided by the Energos Penguin, a 160,683 cubic meter vessel built in 2014. The terminal is entirely backed by investment funds managed by Apollo Global, following NFE’s partial sale of the infrastructure.
While completing the Altamira terminal, NFE has hinted at expanding LNG shipments to Puerto Rico, where it already has a regasification terminal. The company has been in negotiations with local regulators and power companies to secure contracts for supplying natural gas to the island.
In January 2024, NFE secured a favorable ruling from U.S. Customs and Border Protection (CBP), allowing LNG produced at the Altamira terminal to be transported by non-U.S. vessels without violating the Jones Act. This ruling opens the door for NFE to sell and deliver LNG from the Altamira facility to U.S. markets, including Puerto Rico.
Though there have been some concerns about the pace of volume growth into Puerto Rico, NFE’s outlook brightened when it received a “non-FTA permit” from the Department of Energy (DOE). This permit allows NFE to export LNG from the Altamira terminal to non-Free Trade Agreement (non-FTA) countries, making it the first such approval since the Biden administration’s temporary pause on new LNG export facilities. Under this permit, NFE can export up to 1.4 million tonnes of LNG annually for the next five years.
With its first cargo bound for Baja California, Mexico, NFE’s floating LNG terminal is poised to become a critical hub for exporting U.S.-origin LNG to global markets, providing new opportunities for energy trade and positioning the company for future growth.
