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New Fortress Energy Planning Two LNG Plants in Northeast Pennsylvania

New Fortress Energy LLC is developing plans for two facilities that would liquefy natural gas produced in the Marcellus Shale of Pennsylvania, according to a recent filing with federal regulators.

One of those small scale facilities is in the advanced design and permitting stages and is expected to be completed in 4Q2020, according to a registration statement filed with the U.S. Securities and Exchange Commission to take the company public. The second liquifier is expected to be online by 1Q2021.

The company said it has already entered into a 15-year supply contract for feedgas, with pricing that is “generally fixed” at $2.50/MMBtu. The facilities would be capable of producing 3-4 million gallons/day of liquified natural gas (LNG).

While the prospectus does not reveal the proposed locations, New Fortress presented its plans to Wyalusing Township officials in Bradford County this month, according to news media reports. According to the reports, it has purchased 265 acres to build a liquefaction plant near the township.

New Fortress, an affiliate of New Fortress Energy Holdings LLC and global investment manager Fortress Investment Group LLC, already operates a liquefaction facility near Miami. The Florida plant came online in 2016 with the capacity to produce 100,000 gallons/day of LNG with 270,000 gallons of storage capacity.

The company also operates two downstream terminals in Jamaica and has another three terminals under development in Ireland, Mexico and Puerto Rico. According to the filing, New Fortress over the next five years intends to develop up to 20 downstream terminals and up to 10 liquefaction facilities.

New Fortress said it is focused on providing liquefaction solutions in remote areas with stranded gas. The company also said in its prospectus that a tanker truck fleet would move LNG from its first facility in Pennsylvania to a port along the Delaware River about 200 miles away, where it soon expects to finalize a lease for a facility.

There are some other LNG facilities throughout eastern Pennsylvania, including in the northeastern part of the state. Bradford County, however, is among one of the largest gas-producing regions in the Marcellus. Unconventional wells in Bradford, Susquehanna, Washington and Greene counties have consistently accounted for two-thirds of all the gas produced in Pennsylvania.

New York City-based New Fortress is betting its growth on the need to satisfy growing global power demand with natural gas.

“We believe the world is ‘long’ gas and ‘short’ power and that natural gas is a compelling fuel for power production,” the company said in its registration statement. “But because much of the world’s natural gas reserves are not directly connected by pipeline to electricity producers and other end-users, it must be otherwise transported.”

The liquefaction plants New Fortress intends to build are expected to cost $750-850 million. By liquefying the gas near producing fields, management also expects to minimize the transport and pipeline costs for producers.

“We believe that, by building smaller facilities and optimizing efficiencies, we will be able to construct our liquefaction facilities significantly faster and more economically than those typically developed in the industry.”

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