New Fortress Energy Signs 15 Year Contract To Supply Natural Gas To Norsk Hydro’s Brazil Refinery
Energy infrastructure company New Fortress Energy has signed a Memorandum of Understanding (MOU) to supply natural gas to a subsidiary of Norsk Hydro. The agreement with the Alunorte Alumina Refinery in Brazil will last for a period of 15 years.
Under the MOU New Fortress Energy will deliver a minimum agreed-upon volume of natural gas from its Barcarena LNG terminal.
New Fortress Energy (NFE) Chairman and CEO Wes Edens said, “We look forward to this long-term partnership and are pleased to assist Hydro with the transition of the Alunorte refinery to utilizing a cleaner and more affordable supply of energy.”
Hydro is converting part of its steam generation and purification process from fuel to natural gas which is expected to decrease emissions by about 20%. (See New Fortress Energy stock analysis on TipRanks)
New Fortress Energy expects the Barcarena terminal completion and natural gas supply to start in 2022.
Last month, Stifel Nicolaus analyst Benjamin Nolan reiterated a Buy rating on the stock and raised the price target to $58 (29.9% upside potential) from $50.
Noting the opportunity in Fast LNG for the company, Nolan said it enables New Fortress to build a fixed price LNG source in half the time versus its competitors.
Consensus on the Street is that New Fortress Energy is a Moderate Buy based on 2 Buys and 2 Holds. The average analyst price target of $54.75 implies upside potential of 22.6%. Shares have gained about 316.2% over the past year.
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