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July 6, 2022

New Fortress to offload LNG infrastructure to new JV for $2bn

Funds managed by Apollo have a stake of around 80% in the new JV, with NFE owing the remainder.

New Fortress Energy (NFE) has agreed to divest 11 liquefied natural gas (LNG) infrastructure vessels to a new joint venture (JV), set up with Apollo Global Management, in a $2bn deal.

With a stake of around 80%, the JV is majority-owned by funds managed by Apollo.

The remaining 20% interest is held by NFE.

Upon accounting for its share of the JV and debt paydown, NFE will secure around $1.1bn in proceeds.

NFE will also charter ten of the 11 vessels for up to 20 years. This will be effective upon deal completion or expiration of the ships’ current third-party charter agreements.

The 11-vessel portfolio includes six floating storage and regasification units (FSRUs), two LNG carriers and three floating storage units (FSUs).

The deal enables the establishment of a global marine infrastructure platform, which will offer key infrastructure for the delivery, storage and regasification of LNG to countries worldwide.

Under third-party charters, the platform will also serve a varied customer base of utilities and energy companies globally.

NFE chairman and CEO Wes Edens said: “Together with Apollo, we are creating a leading LNG marine infrastructure platform to help accelerate the energy transition while freeing up capital to continue to invest into our Fast LNG and downstream LNG projects worldwide.

“We are pleased to be partnering with Apollo in creating a maritime infrastructure company that will help support NFE’s growing LNG infrastructure needs going forward.”

Pending regulatory clearance, the deal is anticipated to close in the third quarter of the year.

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