September 16, 2025 – La Fortaleza, San Juan, Puerto Rico – Governor Jenniffer González-Colón, together with Energy Czar and Executive Director of the Puerto Rico Public-Private Partnerships Authority (P3A), Josué Colón, and Executive Director of the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF, for its Spanish acronym) and Chief of Staff to the Governor, Francisco Domenech, announced significant savings in the purchase of liquefied natural gas (LNG).
The agreement, submitted to the Financial Oversight and Management Board for Puerto Rico (FOMB) for approval, establishes historic protections for the people’s interests, including substantial savings and the elimination of the exclusivity clause for the use of the New Fortress Energy (NFE) terminal in the Port of San Juan.
“Our public policy is centered on direct and transparent actions in favor of the people of Puerto Rico. With the protection of the people’s interests as our priority, today we announce that after an exhaustive negotiation process, we achieved substantial modifications to the agreement with NFE, which provides significant savings to the treasury and stronger protections for our citizens. This is what it’s about, securing the best deal for Puerto Rico,” said the Governor.
The original NFE proposal, dated June 28, 2025, contemplated a 15-year extension with exclusivity provisions, representing an estimated cost of $20.1 billion.
After negotiations led by P3, the Office of the Chief of Staff, and the 3PPO, a new draft agreement was reached on September 12, 2025, reducing the total estimated cost to approximately $4 billion; shortening the duration to seven (7) years with an option for three (3) additional years; eliminating exclusivity clauses; securing competitive prices; adjusting minimum purchase quantities to levels certified by Genera Puerto Rico and validated by the 3PPO’s technical team; and including a Tolling Agreement that allows the Government to use the San Juan LNG terminal in the event NFE is unable to supply the fuel.
Achievements of the renegotiated agreement include:
· Cost reduction: Estimated savings of $16 billion compared to the original contract.
· More flexible term: Reduced from fifteen (15) years to seven (7) years, with an option for an additional three (3) years.
· More competitive prices: Reduced price formula for temporary units (the “Adder” lowered from $10.29 to $7.95) while maintaining the same 2019 agreed formula for San Juan Units 5 and 6 (the “Adder” remains at $6.50).
· Annual savings: Prices represent estimated annual savings in excess of $50 million, totaling more than $350 million in savings over the contract’s duration.
· Realistic consumption volumes: Annual contracted quantities reduced from 100M to 75M MMBtu, and the “Take or Pay” obligation reduced from 70M to 40M MMBtu, aligned with current demand certified by system operators.
· Elimination of exclusivity: Puerto Rico retains flexibility to diversify its LNG suppliers. If NFE fails to supply fuel, under the new September agreement, other suppliers may use the terminal.
· Protection against non-compliance: NFE will assume 100% of the cost of alternative fuel if it fails to meet LNG supply obligations.
· ‘Tolling Agreement’: Grants access to terminal infrastructure at a cost of 50 cents per MMBtu if NFE cannot deliver LNG, comparable to costs at similar terminals in the rest of the U.S.
“This agreement advances Puerto Rico’s energy transition by reducing reliance on more polluting fossil fuels such as Bunker C and diesel. Using natural gas as a transition fuel not only represents substantial savings compared to Bunker C and diesel but also improves efficiency in power generation, reduces emissions, lowers maintenance and operating costs, and supports progress toward a more sustainable energy future aligned with system resilience goals,” said the Energy Czar and Executive Director of P3A.
“We recognize challenges remain regarding NFE’s financial situation, but this new contractual framework positions Puerto Rico to better balance LNG accessibility, fiscal prudence, and energy security, while safeguarding the people’s interests, which is the guiding principle of our Governor’s administration,” added the Chief of Staff and Executive Director of AAFAF.
“This draft represents a decisive shift in Puerto Rico’s favor. We have succeeded in protecting consumers and public finances while maintaining energy and fiscal flexibility,” the Governor concluded.
The agreement is now under evaluation by the FOMB, which will be responsible for the final determination of its validity and fiscal feasibility under the framework of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).
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