Naturgy Extends LNG Supply Contract with Puerto Rico
Spanish energy group Naturgy has secured an extension on its contract to supply LNG to the Puerto Rico Electric Power Authority (Prepa) from 2020 until 2032, it said on October 28.
The contract now covers 2bn m3 of annual gas supply at entirely Henry Hub-indexed prices, potentially rising to 3bn m3 depending on Puerto Rico's needs. Previously the deal was for only 1.5bn m3/yr of gas, and prices were indexed partly to Henry Hub and partly to oil.
The LNG will come from Naturgy's existing contracts portfolio, strengthening its revenue stream. The contract will also mean over 50% of Naturgy's US LNG procurement will be bought and sold using the same price index for 10 years, ensuring margins and reducing risks.
Naturgy's part-owned Puerto Rican subsidiary EcoElectrica has also secured an extension to a power purchase agreement with Prepa until 2032.
"These agreements represent a significant step forward in Naturgy’s strategy to reduce the volatility and risks of our businesses, as they ensure a stable, long-term margin, both for the supply of LNG to Puerto Rico and for power generation thorough a 530-MV combined cycle, which supplies over 20% of the island’s electricity,” Naturgy chairman Francisco Reynes commented.