Fortress Investment Group’s first year in the energy business has, so far, largely vindicated the company’s strategy in that sector. The group, which manages over $70 billion in assets, created an energy subsidiary at the start of 2018 that it calls New Fortress Energy. The unit was originally created as a vehicle to operate Fortress Investment Group’s Miami gas liquefaction plant. After strategic investments by its parent company, New Fortress Energy has today become a major player in the delivery of high-quality liquefied natural gas throughout the Caribbean and beyond.
From Startup to IPO in Less Than a Year
Started by the experienced financial leaders of Fortress Investment Group, New Fortress Energy is currently in the early stages of carrying out an initial public offering. This comes less than a full year after the company started operations. Such rapid progression from a startup to a company seeking a public listing may seem rushed. But New Fortress has the revenues, the immense future prospects and the present contracts to make this company an investment with the potential to skyrocket in the years to come.
Currently, New Fortress operates four liquefied natural gas terminals in Jamaica and a gas liquefaction plant in Miami, one of the few such plants in the United States. But as one of the most-integrated companies in the liquefied natural gas sector, New Fortress has some auspicious prospects on its horizon. The company is constructing liquefied natural gas terminals in Ireland and Mexico that will rank among the first and largest facilities of their type in both countries. And the company has plans to build a liquefied-natural-gas-fueled power plant in Ireland that will be provide low-cost, low-emissions and highly efficient energy to much of Western Ireland.
Providing the Energy That Drives Achievement
New Fortress Energy has evolved into one of the most thoroughly integrated energy companies in America. The company has had the unique benefit of being a subsidiary of one of the foremost financial conglomerates in the country. This special relationship with Fortress Investment Group has ensured that New Fortress Energy has had the capital available to launch projects almost instantly. And it has been this ability to be the first to market that has allowed for the company’s breakneck expansion throughout the Caribbean and elsewhere.
But talk to New Fortress management, and it quickly becomes apparent that growth is not the top priority of the firm. The driving force behind what the company does is the very consciously held idea among its employees that it is really helping to change lives. Prior to New Fortress’ entrance to the Island of Jamaica, that country was relying on inefficient, price-volatile and expensive heavy fuel oil. Heavy fuel oil is a major pollutant, emitting large amounts of sulfur dioxide and carbon dioxide. It produces many times more smog than diesel fuel and contributes to poor local air quality.
Through its liquefied natural gas receiving terminals at Montego Bay and Old Harbor in Jamaica, New Fortress is helping to bring efficient, clean and cost-effective energy to a country that has long suffered from substandard infrastructure and high levels of pollution. The company is also building a liquid-natural-gas-fired power plant for Jamalco, a Jamaican aluminum mining and processing company, which is anticipated to deliver immediate cost savings in the 30 to 40 percent range while greatly reducing emissions and improving the quality of local air. It is anticipated that these facilities will contribute to significant boosts to Jamaica’s economy, helping the downtrodden island to achieve its fullest potential.
With modern technology, infrastructure and transportation, liquified natural gas has become among the safest forms of energy. This is yet another way in which New Fortress is helping countries that have historically suffered from underdevelopment to achieve wellbeing for each of their citizens. With its state-of-the-art floating storage and regasification units, New Fortress is able to all but eliminate safety risks. Whereas fuel oil, diesel and nuclear power carry potentially lethal safety risks to facility employees and the local population, modern safety protocols have rendered the storage and use of liquefied natural gas almost completely risk free.
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Rapid Deployment
In Mexico, New Fortress Energy has already broken ground on a new import terminal in Mexico’s Baja California region. The terminal will be located in a town called Pichilingue, located at the southern tip of the Baja Peninsula. The $185 million facility will feature a cutting-edge floating storage and regassification unit and will be strategically located for ease of transporting the gas to local power stations.
The company’s Montego Bay, Jamaica project has also gone from the drawing boards to construction in an incredibly short timeframe. The Montego Bay project represents the company’s most complex project to date. There, the company’s floating storage and regassification unit will be directly providing 100 percent the fuel to the Bogue Power Station, a 120-megawatt power plant that has historically suffered from fuel shortages and volatile output. The conversion of the plant to liquefied natural gas is anticipated to provide far-steadier and less-costly energy to the people of Montego Bay.
As with all of the company’s projects throughout its brief history, the developments in Mexico and Jamaica have been greatly aided by the company’s ability to rapidly source and deploy capital. New Fortress has also benefited from the company’s deep integration of assets and infrastructure. This has meant that the company has been able to avoid many of the drawn-out negotiations and logistical difficulties that have plagued other energy startups. With its transportation and infrastructure assets almost fully owned in-house, New Fortress and Fortress Investment Group are able to deploy capital and logistics assets with a speed that few other energy companies can match.
Visions of the Future
Some potential investors may be turned away by the fact that New Fortress’ first year of operation saw a net operating loss of $43 million on a book value of more than $300 million. But first-year profits are far from the complete story with this well-poised energy startup.
Aside from direct philanthropy, like the recent $4.5 million donation that the company made to RISE Life, a Jamaican charity that helps underprivileged youth, New Fortress may be positioned better than any other company on Earth to really help the world’s developing nations reach a higher socioeconomic level for all their people.
This boils down to one critical fact: Recent developments in the production and transportation of liquefied natural gas have made this fuel possibly the safest, cleanest and most cost-effective hydrocarbon that exists. And New Fortress is positioned to bring these potentially game-changing advantages to developing countries across the globe. This is not just good news for the tens of millions of people who stand to benefit from the cheap, reliable and clean energy that New Fortress offers, but it is also a superlative opportunity for the company itself, which has projected that its total liquefied natural gas production will increase by a factor of as much as 24 times over just the next two years.
Although New Fortress has only been in business for a year, its employees‘ millions of man hours of experience and the tremendous expertise of the Fortress Investment Group mean that the company likely has what it takes to compete on the world stage. The future will soon tell.
Click here to learn more about Fortress Investment Group and New Fortress Energy.
