New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Investor Presentation (July 2021)
57 slides from New Fortress Energy's investor presentation, July 2021
Slide 1: Annual Investor Update
July 2021 Annual Investor Update
Slide 2: Last 12 months have been extraordinary for NFE
Executive Summary Last 12 months have been extraordinary for NFE Jamalco CHP, Miami Jamaica Shannon, 1 Greatly expanded our footprint Liquefier, USA Ireland Montego Bay, from 3 to 11 LNG import terminals & Jamaica facilities(1) San Juan, Puerto Rico La Paz, 2 Completed construction of Mexico Old Har
Slide 3: Impact of these activities will be reflected in Illustrative Annualized Op. Margin Goal
Executive Summary Impact of these activities will be reflected in Illustrative Annualized Op. Margin Goal(2) Q4 2021 expected to be first “clean quarter” with Illustrative Annualized Op. Margin Goal of $1.5bn by end of 2023 2021 2022 2023 $500mm $1.1bn $1.5bn Illustrative Annualized Illustrative Ann
Slide 4: What are our expectations for operating margin through 2023?
Question 1 What are our expectations for operating margin through 2023? 4
Slide 5: ~$1.6bn Illustrative Op. Margin Goal
Operating Margin ~$1.6bn(4) Illustrative Op. Margin Goal Committed GPD Total Volumes 18.8mm 20.0mm 13.7mm 9.7mm 11.0mm 6.5mm 10.0mm 4.2mm 3.7mm 6.9mm 5.8mm 5.9mm 1.4mm 1.5mm 2.6mm 2.4mm 3.4mm 4.1mm 3.2mm - Q1 Q2 Q3 Q4 FY’21 Q1 Q2 Q3 Q4 FY’22 FY’23 Run-Rate Committed GPD Jamaica & US 894k 994k 1,008k
Slide 6: Each of our markets has unique characteristics & opportunities
Market Opportunity Each of our markets has unique characteristics & opportunities NFE Expected Volumes (GPD) Electricity % GDP consumed Installed electricity Total Total Annual GDP annual per capita Capacity generated Committed(5) Likely(6) Total Total Population growth rate (USD) growth (kWh) (MW)
Slide 7: Brazil: declining gas supply & critical power shortages amidst growth
Brazil Brazil: declining gas supply & critical power shortages amidst growth Brazil is in urgent need of reliable, competitive LNG to supply and decarbonize growing power, industrial, and transport needs Country overview Majority of power is Brazil’s energy system faces intermittent hydro(i) two mai
Slide 8: Pursuing two main opportunities in Brazil
Brazil Pursuing two main opportunities in Brazil Significant opportunity to decarbonize Amazon & replace declining and high-priced gas supply Decarbonize Amazon Replace declining & high-priced gas supply Barcarena terminal can help decarbonize Amazon by converting from HFO to gas Suape & Santa Catar
Slide 9: 3 new terminals under development expected online in Q1 2022
Brazil 3 new terminals under development(9) expected online(10) in Q1 2022 Barcarena Santa Catarina Volumes (GPD) (11) (11) Committed(5) Likely (6) Total Capacity (8) Commence Operations: expected Commence Operations: expected Barcarena 979k 857k 1,835k 9,559k January 2022 March 2022 Status: EPC con
Slide 10: Puerto Rico is largely unconnected to pipelines & reliant on oil-based fuels
Puerto Rico Puerto Rico is largely unconnected to pipelines & reliant on oil-based fuels Puerto Rico needs more reliable, environmentally-friendly power Territory overview(i) Majority of power is Puerto Rico’s energy system thermal and oil-based(ii) faces three main challenges Vega Baja Barceloneta
Slide 11: Pursuing three main strategies in Puerto Rico
Puerto Rico Pursuing three main strategies in Puerto Rico Significant opportunity to help decarbonize Puerto Rico while providing more reliable, efficient power Supply Build new Supply large existing gas-fired industrial power plants power users Serve existing Strategically Provide large gas plants
Slide 12: Puerto Rico facility commissioned during COVID
Puerto Rico Puerto Rico facility commissioned during COVID Committed volumes(5) at ~900k GPD with additional ~725k GPD likely (6) Updates 100+ loads completed despite COVID-19 6+ customers Volumes (GPD) Committed(5) Likely(6) Total Capacity(8) 889k 727k 1,616k 2,700k 12
Slide 13: Jamaica's energy system has been greatly decarbonized since our arrival
Jamaica Jamaica’s energy system has been greatly decarbonized since our arrival Jamaica still has further opportunities for decarbonization, particularly in the marine sector Country overview(i) Majority of power Jamaica’s energy system is thermal(i) faces two main challenges 81% 64% 17% renewable 1
Slide 14: Pursuing two main opportunities in Jamaica
Jamaica Pursuing two main opportunities in Jamaica Significant opportunity to decarbonize Jamaica’s old power plants and the marine industry Decarbonize old power plants Marine bunkering There are incremental opportunities to complete Jamaica’s decarbonization by converting old power plants to gas I
Slide 15: Our Jamaica terminals are serving over 21 customers
Jamaica Our Jamaica terminals are serving over 21 customers Committed volumes(5) at ~1,000k GPD with additional ~535k GPD likely(6) Montego Bay Volumes (GPD) 3 Committed(5) Likely (6) Total Capacity (8) assets Montego Bay 406k 120k 526k 740k 21+ Old Harbour 656k 415k 1,071k 6,000k customers NFE term
Slide 16: BCS, Mexico is an energy island & highly reliant on oil-based fuels
Mexico BCS, Mexico is an energy “island” & highly reliant on oil-based fuels Significant growth constrained by lack of power with need for environmentally-friendly options Territory overview Majority of power is La Paz’s energy system faces thermal and oil-based(i) three main challenges 5% renewable
Slide 17: Pursuing four main opportunities in BCS
Mexico Pursuing four main opportunities in BCS Several paths to grow our business in the region Supply Create own Convert existing Bunkering existing CFE merchant power plants to gas plants with gas 17
Slide 18: La Paz, Mexico terminal began operations this month
Mexico La Paz, Mexico terminal began operations this month Committed volumes(5) at ~560k GPD with additional ~1,000k GPD likely (6) Updates Commenced operations on July 14, 2021 First use of NFE’s proprietary ISOFlex system Power plant expected online in next quarter Volumes (GPD) Committed(5) Likel
Slide 19: Nicaragua suffers from critically limited energy supply
Nicaragua Nicaragua suffers from critically limited energy supply High dependency on antiquated power plants & oil-based fuels Majority of power is Nicaragua’s energy system Country overview thermal and oil-based(i) faces two main challenges 45% renewable 1 Antiquated legacy power plants create inef
Slide 20: Pursuing three main strategies in Nicaragua
Nicaragua Pursuing three main strategies in Nicaragua Opportunity to address critical domestic energy needs as well as serve additional nearby markets Baseload Exporting Supply large power power industrial users NFE’s 300 MW plant Excess power can serve Terminal is strategic hub provides baseload po
Slide 21: Nicaragua terminal coming online in next 60 days
Nicaragua Nicaragua terminal coming online(10) in next 60 days Committed volumes(5) at ~700k GPD with additional ~180k likely (6) Updates Will feature NFE’s proprietary ISOFlex system Expected online date: September 2021 Volumes (GPD) Committed(5) Likely(6) Total Capacity(8) GPD 695k 180k 875k 2,400
Slide 22: Ireland suffers from a shortage of baseload power & single source for gas
Ireland Ireland suffers from a shortage of baseload power & single source for gas Energy security is a critical issue for the country Country overview Gas is expensive and Ireland’s energy system faces supply is depleting(i) two main challenges 1 Expensive UK imports with no alternative; indigenous
Slide 23: Pursuing two main strategies in Ireland
Ireland Pursuing two main strategies in Ireland Securing Ireland’s energy future Build LNG Build new import terminal thermal generation Ireland's first LNG import Strategically locate thermal terminal generation Displace expensive UK imports Serve increasing demand for data centers and base load Sel
Slide 24: Our Ireland terminal development is progressing on time
Ireland Our Ireland terminal development is progressing on time ~5,000k GPD likely volumes(6) (11) Updates Volumes (GPD) August 2021 March 2022 Q1 2022 Q3 2022 2H 2023 Committed(5) Likely(6) Total Capacity(8) Permits Permits NTP & Pipeline Terminal GPD - 5,000k 5,000k 10,000k submitted in hand equip
Slide 25: Sri Lanka is reliant on antiquated oil plants and oil-based fuels
Sri Lanka Sri Lanka is reliant on antiquated oil plants and oil-based fuels Sri Lanka has no existing gas infrastructure amidst a growing population and high power costs Sri Lanka is heavily reliant on Sri Lanka’s energy system Country overview oil-based fuels(i) faces three main challenges 46% rene
Slide 26: Pursuing three main strategies in Sri Lanka
Sri Lanka Pursuing three main strategies in Sri Lanka Opportunity to introduce natural gas to the country Sri Lanka’s first Existing New baseload LNG import baseload power power terminal Construct LNG terminal Invest in existing 300 MW Signed MOU with LTL 4km offshore of Yugadanavi Power Plant Holdi
Slide 27: Sri Lanka terminal is making significant progress
Sri Lanka Sri Lanka terminal is making significant progress ~1,200k GPD committed volumes(5) Volumes (GPD) Committed(5) Likely (6) Total Terminal capacity (8) 300 MW 560k - 560k Yugadanavi 350 MW - 632k 632k New Plant Total Volume 1,192k - 1,192k 6,000k Yugadanavi Power Plant Updates July 2021 Aug 2
Slide 28: How exposed are you to commodity risk?
Question 2 How exposed are you to commodity risk? 28
Slide 29: LNG markets are currently tight
Gas Supply LNG markets are currently tight Near-term tightness alleviated in future years as additional supply comes online Price curves(i) Current tightness driven by: Outlook: 12 10 8 disruptions due to Currently $/MMBtu 1 6 weather events high prices 4 will decline 2 increasing Chinese 2 in comin
Slide 30: Our gas exposure is covered on current committed volumes
Gas Supply Our gas exposure is covered on current committed volumes(5) We have minimal exposure on committed volumes(5) at operational facilities Committed Demand from 2022 2023 2024 2025 Operational (kGPD) (10) Sergipe, Brazil 389 207 207 207 We have purchased enough gas Jamaica 1,004 1,065 1,065 1
Slide 31: Our goal is to reduce or eliminate commodity risk to our business
Gas Supply Our goal is to reduce or eliminate commodity risk to our business We have purchased gas to meet our demand For next 6 years, we have purchased Supplier 2022 2023 2024 2025 2026 2027 167 cargoes, equivalent to $3.2bn Shell 14 14 14 14 8 8 Cheniere 10 16 16 16 14 10 Ocean LNG 3 2 2 2 2 2 Lo
Slide 32: What is FLNG?
Fast LNG What is FLNG? FLNG is a liquefier built on a ship that can access stranded offshore gas fields 7 FLNGs in world (operational or under development) NFE owns 50% of Hilli(13) FLNG FLNG Hilli 32
Slide 33: How big is the opportunity?
Fast LNG How big is the opportunity? Currently only a few FLNGs servicing significant amount of stranded gas 37 28 85 296 19 14 76 133 91 133 Europe 20 13 218 Eurasia 50 109 102 North America Middle East 673 50 508 51 63 56 Africa 159 94 28 26 46 44 Latin America Reserves over production ratios (no.
Slide 34: How does Fast LNG work?
Fast LNG How does Fast LNG work? Fast LNG is less expensive and faster than traditional FLNG Fast LNG is a mobile, floating natural gas liquefaction platform Floating LNG (FLNG) cryogenic flexible ship to ship transfer (5 years ago) hose system liquefier storage vessel jackup rig LNGC FSRU converted
Slide 35: What have we done?
Fast LNG What have we done? Expected to commence operations on our first Fast LNG facility in Q4 2022 We purchased 3 jack-up rigs We’re shrinking footprint & weight of equipment Need ~75k-100k square feet of deck space (11) Timeline March 2021 June 2021 September 2021 July 2022 Q4 2022 Declared FID
Slide 36: What is the goal?
Fast LNG What is the goal? Accessing stranded gas is a win-win for both NFE and our partners Our benefits Partner benefits Faster, with Cheaper, with costs Significant returns Domestic gas development time of construction for shareholders production and use ~$500mm less than 18 months ~$500mm benefi
Slide 37: Next steps
Fast LNG Next steps Select field for our Commence first deployment in operations 30-60 days in Q4 2022 37
Slide 38: How do we pay for our growth?
Question 3 How do we pay for our growth? 38
Slide 39: What is the current financing situation?
Liquidity What is the current financing situation? NFE maintains a simple balance sheet and capital structure Total Capitalization Deleveraging as Projects Turn Online $11.2 bn Base Case Debt 3.7x $2.95bn NFE Corporate $4.6 bn $1.6bn Asset Backed 41% Equity 2.9x $138mm Preferred Equity $6.5bn NFE Ma
Slide 40: What is the growth plan?
Liquidity What is the growth plan? We need $1.6bn to finance our growth plan Funding Needs ($mm) Mexico + Nicaragua $250 1 Fast LNG (remaining) $475 $1.6bn total Brazil (Terminals + Suape Power Plant) Sri Lanka $350 $300 = needs Ireland Terminal $150 (over 2 Other Capex (Small Scale / Drydock / Ship
Slide 41: What is our capital plan?
Liquidity What is our capital plan? We plan to finance unencumbered marine vessels and monetize select assets Funding Sources ($mm) New LC Facility (80% of $75 available) Signed $60 Jamalco Sale Leaseback (net) Signed and $100mm committed $280 Ship Financings (net) Signed and $300mm committed $800(1
Slide 42: What is our sustainability plan?
Question 4 What is our sustainability plan? 42
Slide 43: The carbon emissions crisis needs an immediate solution
Clean Fuels The carbon emissions crisis needs an immediate solution We want to lead the energy transition by supplying customers with clean, hydrogen-based fuels The carbon emissions situation Carbon dioxide emissions have risen exponentially Fossil fuels like coal, oil and gas are major sources of
Slide 44: Hydrogen as a clean fuel solution
Clean Fuels Hydrogen as a clean fuel solution Most of today’s hydrogen is produced with significant carbon dioxide emissions Where is hydrogen Hydrogen Hydrogen Production commonly found today? H H H H C H Steam Methane Reforming • Most abundant element in H • Vast majority of hydrogen comes from th
Slide 45: Blue ammonia is an ideal carrier molecule for hydrogen
Clean Fuels Blue ammonia is an ideal carrier molecule for hydrogen Make hydrogen Remove and Add nitrogen Produce blue via SMR sequester all CO2 from air ammonia Why blue ammonia? • Efficient hydrogen carrier • Clean, carbon-free fuel • Easily transported in liquid form • Compatible with existing pip
Slide 46: We are building a clean fuels company
Clean Fuels We are building a clean fuels company We will sell blue ammonia as a carbon-free fuel to power, transport & industry Our strategy CO2 Buy an existing Make it blue by Produce & sell blue ammonia facility or capturing and ammonia as a clean build our own sequestering CO2 hydrogen-based fue
Slide 47: Illustrative blue ammonia economics
Clean Fuels Illustrative blue ammonia economics Countries and companies are Real economic implications for carbon emitters will increasingly placing a price on carbon(i) accelerate the transition to clean fuels like blue ammonia 2000 2021 places with carbon taxes 7 61 or price mechanisms in place to
Slide 48: We have also published our first annual Sustainability Report
Sustainability We have also published our first annual Sustainability Report The report includes our: Our goal is to be as transparent as possible for investors approach to sustainability We have used industry standard 2020 accomplishments & future targets reporting including: emissions footprint SA
Slide 49: What is our valuation expectation assuming we achieve these goals?
Question 5 What is our valuation expectation assuming we achieve these goals? 49
Slide 50: Base case supports ~$82 to $120/share
Valuation Base case supports ~$82 to $120/share Base Case Valuation @ 15x (Committed + Likely, Run-Rate YE 2023) $bn 15x 20x Illustrative Annualized Op. Margin Goal(2) 1.6 1.6 (-) Cash SG&A(14) 0.1 0.1 Subtotal 1.5 1.5 (x) Multiple (18) 15 20 Total Enterprise Value 23 31 (-) Consolidated Debt(19) (6
Slide 51: Appendix
Appendix 51
Slide 52: Key modeling assumptions
Appendix Key modeling assumptions 1) Volumes • Committed Run-Rate volumes of 5.9mm gpd including 1.1mm Jamaica, 0.9mm PR, 0.6mm Mexico, 0.7mm Nicaragua, 1.2mm Sri Lanka, 1.5mm Brazil • Additional likely volumes of 12.9mm gpd including Ireland (5.0mm) and Brazil terminals (5.4mm) and organic growth f
Slide 53: Disclaimers
Disclaimers IN GENERAL. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “Presentation.” FORWARD-LOOKING STATEMENTS. Certain statements regardi
Slide 54: Endnotes
Endnotes 1. “11 terminals and facilities” refer to our 6 operational LNG import terminals and facilities: Montego Bay, Jamaica; Old Harbour, Jamaica; San Juan, Puerto Rico; La Paz, Mexico; Puerto Sandino, Nicaragua (expected September 2021); and Sergipe, Brazil, plus our 5 LNG import terminals and f
Slide 55: Endnotes
Endnotes 3. “Clean quarter” means the first quarter where all our developments with committed GPD, excluding Sri Lanka, are expected to contribute meaningfully to earnings and normalizes for any planned or unplanned maintenance events that may be experienced during the quarter. The Committed GPD, Li
Slide 56: Endnotes
Endnotes 9. “In Construction”, “Under Construction”, Development”, “In Development” or similar statuses means that we have taken steps and invested money to develop a facility or FLNG vessel, including procuring land rights and entitlements, negotiating or signing construction contracts, and underta
Slide 57: Endnotes
Endnotes 16. $800mm assumes the ultimate size of the debt we expect to incur to finance the ships. 17. Illustrative blue ammonia economics is based upon management’s current expectations for capex and volume related to a single plant. 18. Multiples are based on management’s current estimates and vie
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