Puerto Rico Sues New Fortress Energy Over Natural Gas Supply Disruption

The government of Puerto Rico is taking action against New Fortress Energy to ensure an alternative natural gas supply for its power generation system. Governor Jenniffer González Colón has ordered PREPA, through the Public-Private Partnerships Authority (P3) and the Third-Party Procurement Office (3PPO), to file a lawsuit in federal court.

The dispute began when NFE stopped supplying natural gas to Units 5 and 6 at the San Juan power plant on September 16, forcing them to switch to diesel. Diesel is generally more expensive than natural gas, causing concerns about fuel costs for electricity generation.

The contract between PREPA and New Fortress Energy includes a provision for tolling agreements, which would allow an alternative supplier to deliver natural gas through NFE's San Juan terminal. However, the government claims that NFE has rejected requests to activate this provision twice.