The U.S. Department of Energy (DOE) has warned New Fortress Energy if any portion of its Altamira floating liquefied natural gas (LNG) project is located onshore Mexico, the company will have to resubmit its application for an export permit.
New Fortress's $1.3 billion Altamira LNG project was expected to start shipping the superchilled gas this month under an export permit issued in June. If the company must reapply for a U.S. export permit, it could further delay the two-phase project.
New Fortress did not immediately reply to a request for comment submitted through its website. The company has received a U.S. license to export Altamira's LNG to Free Trade Agreement (FTA) countries, but not the larger set of non-FTA countries.
New Fortress has proposed many LNG projects that use converted offshore oil production rigs to support LNG processing. Altamira was originally designed with two facilities - Fast LNG1 on converted oil platforms and Fast LNG2 on three fixed platforms. The entire project is set to be Mexico's first producing and exporting LNG facility.
It would use U.S.-sourced gas, the DOE wrote. "If the project site and design have been modified such that FLNG2 will be located onshore in Mexico instead of offshore, NFE Altamira is required ...to request an amendment of its FTA order," the department wrote on Oct. 30.
The DOE's letter pointed to a corporate press release and an Oct. 16 securities filing that suggested the project was a hybrid, with FLNG1 located offshore and FLNG2 set onshore.
The configuration requires clarification, the DOE added, since it might not meet the terms of the export license that governs both parts. In June, Mexico's government granted NFE a permit to export up to 7.8 million metric tons through April 2028. Its existing U.S. FTA authorization allowed it to supply LNG to Mexico and other countries with free trade pacts. The project awaits a decision on its application for a non-FTA export permit.
(Reuters - Reporting by Curtis Williams in Houston; Editing by Josie Kao)