Excelerate Energy acquires Jamaica Downstream LNG from New Fortress Energy

Under the terms of the agreement, Excelerate will acquire the assets and operations of the Montego Bay LNG terminal, the Old Harbour LNG terminal, and the Clarendon combined heat and power (CHP) co-generation plant. Excelerate expects to assume all material contracts currently in place.

“This transaction represents an important milestone in the execution of Excelerate’s downstream growth strategy. It will expand and diversify our platform, while positioning Excelerate as the key provider of essential LNG import infrastructure in a desirable and growing Atlantic basin natural gas market,” said Steven Kobos, President and CEO of Excelerate. “These assets complement our existing operational expertise and our long-term LNG supply agreements, while offering the potential for future growth opportunities as natural gas becomes an increasingly essential part of Jamaica's energy mix.”

Kobos continued: “Importantly, this transaction also enhances our financial profile, providing predictable, long-term cash flows at stable margins with a weighted average remaining contract duration of approximately 21 years including contract extensions. We are confident the addition of this Jamaica platform will deliver significant value for our shareholders, while building on our commitment to providing cleaner and more affordable natural gas to countries across the globe.”

Compelling strategic and financial benefits

• Fully integrated downstream LNG and power infrastructure with high barriers to entry: This strategic acquisition adds downstream and ‘last-mile’ infrastructure to complement and diversify Excelerate’s existing portfolio:
  • Differentiated position as Jamaica’s sole LNG platform with first-mover advantage, benefitting from years of invested capital and history serving industrial customers and the Jamaica power system, including one of the country’s largest gas-fired power plants.
  • Assets include Jamaica’s only two LNG terminals, serving power plants and industrial customers, as well as Jamaica’s only combined heat and power co-generation plant.
• Long-term contracted assets with high-quality customers: Infrastructure-like contract profile with stable margins, attractive long-term offtake tenor and robust recontracting opportunities:
  • 86% of contracted revenue was take-or-pay as of 31 December 2024, with a weighted average remaining tenor of approximately 13 years, representing approximately US$2.9 billion of cumulative take-or-pay direct margin 2025 through 2039.
  • Long-term, Excelerate plans to use its own Venture Global LNG supply which is well-matched with customer offtake commitments, minimising commodity risk.
  • High-quality customers, with a weighted average credit rating of A3 / A-.
• Provider of ‘last-mile’ LNG infrastructure in a desirable atlantic basin natural gas market: Jamaica business strengthens Excelerate’s competitive position, expanding on its core FSRU terminal services and gas supply businesses in a growth market:
  • Diversifies Excelerate’s geographic and operational exposure with position in a highly attractive Atlantic basin market with access to abundant, nearby US Gulf Coast LNG supply sources.
  • Aligns Excelerate’s 20-year Venture Global LNG supply agreement for 0.7 million tpy with the approximately 13-year weighted average contract length, or 21-year average contract length including extensions, for the Jamaica assets.
  • Extends Excelerate’s position as a trusted partner for sovereign governments and major LNG producers around the world.
• Pipeline of potential organic growth opportunities: The acquisition offers opportunities to expand in Jamaica, leveraging existing infrastructure, including:
  • LNG bunkering: Use of existing infrastructure and assets provides opportunity to provide LNG bunkering services in a high-traffic location with strong demand, benefitting from the trend of container and cruise vessels increasingly utilising the Caribbean as a bunkering destination.
  • Expansion of the Clarendon CHP plant: Opportunity to double the generation capacity of the CHP plant, providing valuable baseload power to meet anticipated growth of electricity demand in Jamaica.
  • Incremental gas supply: Ability to continue to grow LNG fuel supply for Jamaica’s industrial base, benefitting from the anticipated continued shift away from oil as natural gas becomes an increasingly essential part of Jamaica's energy mix.
• Enhanced pro forma operational and financial profile: Acquisition has attractive economics and furthers Excelerate’s goal of diversifying the geographic footprint of its asset portfolio:
  • Transaction is expected to be immediately accretive to earnings per share.
  • Provides predictable long-term operating cash flows.

The cash purchase price of US$1.055 billion represents a multiple of approximately 9x the Jamaica business’ 2025E adjusted EBITDA. Excelerate intends to fund the transaction using a combination of permanent financing and cash-on-hand. Excelerate has backstopped the financing with an US$850 million fully committed bridge facility.

The transaction was unanimously approved by the Excelerate and NFE Boards of Directors and is expected to close as early as 2Q25, subject to regulatory approvals and the satisfaction of other customary closing conditions.

Evercore is serving as financial advisor and Gibson, Dunn & Crutcher LLP as legal advisor to Excelerate.

Barclays Bank PLC, Wells Fargo Bank, N.A., Crédit Agricole Corporate and Investment Bank, DNB Bank ASA, Sumitomo Mitsui Banking Corporation, Inc., BNP Paribas S.A., Morgan Stanley, and Nordea Bank Abp, New York Branch are providing committed bridge financing for the transaction. Barclays is leading the committed financing and Simpson Thacher & Bartlett LLP is serving as legal advisor.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/28032025/excelerate-energy-acquires-jamaica-downstream-lng-from-new-fortress-energy/