New Fortress Energy Inc. Q1 FY2024 earnings call

• Puerto Rico: Accelerating transition from distillates to natural gas, saving ratepayers $1B/year. 425 MW power plants now permanent, ongoing settlement discussions with FEMA regarding the early termination of the contract. - Brazil: 2 LNG terminals operational, 2.2 GW power under construction, $500M of long-term cash flow. Upcoming power auctions with competitive advantage due to LNG terminals providing flexible supply. - FLNG: Final commissioning stages, experienced a pipe fracture incident during commissioning but repair expected soon. Asset value over $3B, plans to refinance with project bonds.

Puerto Rico: Has a world-class LNG terminal, logistics assets, and manages over 4,000 megawatts of installed power. Entered an 80 TBtu island-wide contract, with plans to transition from distillates to natural gas, aiming to save Puerto Rican ratepayers $1 billion annually. Brazil: Two LNG terminals are operational, with $500 million of highly predictable and long-duration cash flow. Won 2.2 gigawatts of power under construction, with upcoming power auctions. FLNG: Liquefier is in final commissioning stages, expected to produce first cargo in June. Absolute terms: Q1 EBITDA $340 million. Revenue contribution: Puerto Rico, Brazil, and FLNG segments each contribute to overall financials.

• Puerto Rico: Transition to natural gas expected to continue, potential for Henry Hub indexing in long-term contracts. - Brazil: Expect to capture 2.5 GW in power auctions, growth in LNG supply and power contracts. - FLNG: Expect first cargo in June, plans to refinance with project bonds to reduce corporate debt, aiming for $1.5B - $1.75B in proceeds.

• FLNG Commissioning: Incident with a pipe fracture during commissioning, though damage is isolated and expected to be repaired soon. - Market Pricing: Dependence on LNG spot prices and liquid fuel spreads in Puerto Rico, with potential impacts on margins.

Q: Can your incremental Puerto Rico growth beyond the 80 TBtu PREPA contract also be linked to liquid fuel pricing to afford acceptable spreads during sustained elevated LNG market pricing? And can you update us on current spot LNG spreads to perhaps 73% of landed Puerto Rican diesel? And finally, any thoughts on hedging out LNG to liquid spread risk.

A: Wes Edens and Brannen McElmurray discussed that the Puerto Rico contract is linked to diesel pricing, with 73% of diesel being roughly $15, and mentioned potential transition to Henry Hub indexing in long-term contracts.

Q: On the power auction in Brazil, can you remind us when this power would come online?

A: Andrew Dete stated existing power plants with contracts could come online soon, and new generation power plants could be online by the end of 2026 or early 2027, with potential earlier startup due to existing assets without contracts being eligible.