New Fortress Energy Inc. (NFE)

* NFE ENTERS AGREEMENT WITH PLUG POWER FOR 120 MW GREEN HYDROGEN PLANT ON GULF COAST

* NEW FORTRESS ENERGY INC(NFE) - PLUG TO SUPPLY PEM ELECTROLYZER TECHNOLOGY, EQUIPMENT FOR NFE'S FIRST GREEN HYDROGEN FACILITY

* NEW FORTRESS ENERGY INC(NFE) - WITH DEVELOPMENT OF ADDITIONAL SUPPORTING INFRASTRUCTURE, FACILITY WILL BE SCALABLE TO NEARLY 500 MEGAWATTS Source text for Eikon: Further company coverage:

OMG! I also own PLUG. Both companies will be leaders in the new world order of hydrogen.

The European natural gas crisis is getting even worse, according to Bank of America.

In a Monday research note, the investment bank highlighted Russia's actions to limit supply to the region, adding that winter stockpiles could run low.

"The European gas situation is quickly moving from our 'bad' to our 'ugly' scenario in the past month," the bank said.

Russia has shaken energy markets since it invaded Ukraine and more recently jolted Europe after cutting supply of natural gas to the region. In July, Russia's state-run energy giant Gazprom slashed flows to just 20% along the Nord Stream pipeline, a week after it cut flows completely for a 10-day maintenance period.

RE earnings call – The highlight financially-
Reiterating $1.5bn Adj. EBITDA Goal for 2023 before Fast LNG
• Expected to be materially higher (2-3x) once Fast LNG units come online
The highlight operationally -
Fast LNG expanding rapidly.
There is more than one hydrogen project underway.

The United States became the world’s largest liquefied natural gas (LNG) exporter during the first half of 2022, according to data from CEDIGAZ. Compared with the second half of 2021, U.S. LNG exports increased by 12% in the first half of 2022, averaging 11.2 billion cubic feet per day (Bcf/d). U.S. LNG exports continued to grow for three reasons—increased LNG export capacity, increased international natural gas and LNG prices, and increased global demand, particularly in Europe.

According to our estimates, installed U.S. LNG export capacity has expanded by 1.9 Bcf/d nominal (2.1 Bcf/d peak) since November 2021. The capacity additions included a sixth train at the Sabine Pass LNG, 18 new mid-scale liquefaction trains at the Calcasieu Pass LNG, and increased LNG production capacity at Sabine Pass and Corpus Christi LNG facilities. As of July 2022, we estimate that U.S. LNG liquefaction capacity averaged 11.4 Bcf/d, with a shorter-term peak capacity of 13.9 Bcf/d.

TOKYO -- Prices for liquefied natural gas on the Asian spot market have surged nearly 10 times from average summer rates, causing crippling shortages in emerging nations strapped for foreign currency.

Spot prices for LNG bound for Japan, South Korea and other major Asian economies now hover in the upper $40 range per one million British thermal units. On Wednesday last week, the price briefly topped $50, a high not seen since early March, right after Russia invaded Ukraine.

Because LNG demand typically peaks in winter, the spot rates are usually cheaper in the summer. Summer spot rates averaged about $5 per million BTUs up through 2019.

Added in the 36s today.

Here is a morning piece from Stifel concerning their take on yesterday's flurry of NFE moves:

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Key Points (from Stifel July 6 2022)

Apollo transaction. NFE agreed to sell 11 LNG infrastructure vessels into a newly formed JV between Apollo and NFE for $2 billion. NFE will receive ~$1.1 billion in net proceeds. NFE will have a 20% stake in the partnership while Apollo will have 80%. The JV portfolio will comprise 6 FSRUs, 2 LNG Carriers, and 3 FSUs. The transaction includes NFE chartering 10 of the 11 vessels from the JV for a 20-year period either upon closing or expiration (expected for 3Q22) of the vessels’ existing charters. The specific vessels were not identified, but we expect of the 13 controlled by the company the FSRU Nanook and the carrier Mazo were excluded. We had modeled $1.8 billion of value in the assets, so this is a slight upside to our estimates. Based on our math $226 million of associated EBITDA from the 11 vessels included as part of the JV, implying an 8.85x multiple on the transaction which is reasonable given the older average age of the assets and better than we would have anticipated for NFE.

Lakach Offshore FLNG. NFE entered into an agreement with Petróleos Mexicanos (Pemex) to develop the Lakach deepwater natural gas field. The strategy is for Pemex to supply natural gas to Mexico’s onshore domestic market and NFE will produce LNG for global export. Over a two year period, NFE and Pemex will invest in the completion of seven offshore wells and NFE will also deploy a 1.4 mtpa FLNG unit with the majority of gas earmarked for LNG export, and the remainder to be supplied to onshore markets. The field is expected to have at least 10 years of gas supply, which points to the value of an FLNG unit which does not need 30 year of gas supply at 5 mtpa of capacity like most projects in order to be economic.

CFE deals. NFE has entered into an agreement with Comisión Federal de Electricidad (CFE) to 1) Increase volumes and extend the terms of NFE’s gas supply agreements with CFE to power generation facilities in Baja California Sur, 2) agreed to sell NFE’s 135 MW La Paz power plant to CFE and 3) build a new LNG hub off the coast of Altamira, Tamaulipas where two 1.4 mtpa FLNG units will be deployed and feedgas will be supplied from CFE utilizing CFE’s existing pipeline infrastructure. This effectively ties NFE to future development of LNG and power generation throughout Mexico and creates a pipeline for future FLNG units and import terminals.
Implications. First, this would add three additional FLNG solutions to the nine the company has already announced they intend to build. While we are somewhat uncertain how many of the original nine actually make it to delivery largely due to regulatory, gas supply, and contract challenges, this adds to the list with greater certainty. Depending on the contract specifics of each situation, we expect the payback on investment should be between 1-4 years, so the more of these projects that can be added as fast as possible, the better.
Second, we estimate the creation of the Apollo JV, the sale of the power plant in Baja, and the sale of the Sergipe Power plant in Brazil announced in June should free up ~$1.8 billion of cash after debt repayment. This can in turn can be used to fund the build out of FLNG units. Assuming each vessel would require $350 million of equity capital, that transactions should be able to fund the development of 5 FLNG units alone, more when taking into account cash flow and other liquidity.

Third, with respect to shares, this not only should increase the return profile of the company and demystify funding, but also open the door to additional Fast LNG opportunities. Back of the envelope math points to EBITDA of $2.7 billion by 2025 which we believe could support a share price in excess of our current $58 target.