Puerto Rico signs a $4 billion LNG agreement, Newcastle Energy's stock price soars 45%

The Governor of Puerto Rico confirmed on Tuesday that New Fortress Energy Inc. (NFE.US) has reached a seven-year, $4 billion liquefied natural gas supply agreement to supply liquefied natural gas to Puerto Rico, injecting a shot in the arm for the financially struggling company. The company's stock soared by 45%, closing up 44.93% at $2.00. New Fortress Energy Inc. bonds also rose on the news of the contract. This temporary agreement puts an end to months of turbulent negotiations, as both parties have now reached a long-term agreement to supply liquefied natural gas to Puerto Rico. Puerto Rico's electricity needs rely on imported energy sources. The agreement still requires final approval from the federally appointed Financial Oversight and Management Board (FCB), responsible for overseeing Puerto Rico's financial situation. This agreement will provide much-needed relief for New Fortress Energy Inc. The company has struggled to turn a profit and faced a debt crisis, worsened by delays in the Mexican liquefied natural gas export facility and uncertainties in Puerto Rico. The terms of the agreement also include a three-year extension, as well as a provision that allows the government to use the San Juan liquefied natural gas terminal if New Fortress Energy fails to deliver the fuel. In July of this year, the board vetoed the initial plan to sign a $15 billion contract with New Fortress Energy Inc. However, in the following month, President Trump dismissed six out of seven members of the board. The board has suspended the bankruptcy process of the Puerto Rico Electric Power Authority until new members are appointed, with the White House yet to indicate when the new board will be selected. Governor Jennifer Gonzalez stated in a declaration, "After difficult negotiations, we were able to substantially revise the agreement with New Fortress Energy Inc., saving significant funds for the treasury and providing more protection for the people. This is about securing the best deal for the people of Puerto Rico." The uncertainty surrounding the contract has long plagued the political nerve center of Puerto Rico, an island long troubled by aging energy infrastructure and repeated power outages. New Fortress Energy Inc. is one of several liquefied natural gas suppliers to Puerto Rico and operates the main liquefied natural gas terminal in San Juan. As New Fortress Energy Inc. recently divested its liquefied natural gas assets in Jamaica, the profitability of its remaining liquefied natural gas assets in the Americas has been a focus of attention. According to a statement on Tuesday, New Fortress Energy Inc. plans to supply fuel from its Altamira liquefied natural gas plant on the eastern coast of Mexico. Prior to the announcement of the contract, Bloomberg News reported that advisers to New Fortress Energy Inc.'s creditors were preparing for confidential debt negotiations.