NEW YORK - New Fortress Energy Inc. (NASDAQ: NASDAQ:NFE) has commenced construction on a 1.6-gigawatt (GW) power plant near the Barcarena LNG terminal in Brazil, according to a recent announcement by the company. The project, which is a significant step for Brazil's energy infrastructure, is expected to be operational by August 2026.
The engineering, procurement, and construction contract for the thermal power plant was awarded to a consortium comprising Mitsubishi Power Americas and Andrade Gutierrez. This move follows the closure of a 15-year Capacity Reserve Contract that New Fortress Energy acquired from Denham Capital and CEIBA Energy in March 2024.
The power plant will supply firm power capacity under an agreement with the Brazilian Chamber of Electric Energy Commercialization. This development is part of New Fortress Energy's broader strategy in the region, which includes the recent completion and commissioning of the Barcarena and Santa Catarina TGS terminals in the first quarter of 2024.
The Barcarena LNG terminal will support more than 2,200 MWs of power capacity owned by the company and supply natural gas to Norsk Hydro (OTC:NHYDY)'s Alunorte alumina refinery under a 15-year contract that also commenced this past quarter.
Andrew Dete, Managing Director of New Fortress Energy, expressed gratitude towards partners Mitsubishi Power and Andrade Gutierrez for their collaboration in advancing the project. Tim Shore, Senior Vice President of LATAM Commercial and Regional Leader for Mitsubishi Power Americas, highlighted the project's importance for Brazil's energy transition and the reliability of its national electrical system.
New Fortress Energy is a global energy infrastructure company committed to addressing energy poverty and contributing to the transition to clean energy. The company operates natural gas and LNG infrastructure, along with a fleet of ships and logistics assets to deliver energy solutions to global markets.
The information provided in this article is based on a press release statement from New Fortress Energy Inc.
InvestingPro Insights
As New Fortress Energy Inc. (NASDAQ: NFE) embarks on its significant power plant project in Brazil, its financial metrics and analyst insights reflect a dynamic picture of the company's current standing. With a market capitalization of $5.64 billion, the company's valuation is underlined by a price-to-earnings (P/E) ratio of 9.89, derived from the last twelve months as of Q4 2023, indicating a potentially attractive valuation compared to the industry average.
InvestingPro Tips suggest that while New Fortress Energy operates with a significant debt burden and is quickly burning through cash, analysts are optimistic about its profitability, predicting the company will be profitable this year.
This optimism is further supported by the company's strong return over the last five years. Moroever, the stock's Relative Strength Index (RSI) indicates it is in oversold territory, which could signal a buying opportunity for investors.
With a gross profit margin of 60.28% and an operating income margin of 38.59%, New Fortress Energy showcases robust profitability metrics. Still, it is worth noting that the company's short-term obligations exceed its liquid assets, a point of consideration for those closely monitoring liquidity and solvency.
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