The energy infrastructure company New Fortress Energy has signed a Memorandum of Understanding (MOU) for the supply of natural gas to a subsidiary of Norsk Hydro. The agreement with the Alunorte Alumina refinery in Brazil has a term of 15 years.
Under the agreement, New Fortress Energy will deliver an agreed minimum volume of natural gas from its LNG terminal in Barcarena.
Wes Edens, Chairman and CEO of New Fortress Energy (NFE) said, “We look forward to this long-term partnership and look forward to helping Hydro transition the Alunorte refinery to cleaner, more affordable energy.”
Hydro converts part of its steam generation and cleaning process from fuel to natural gas, which is expected to reduce emissions by around 20%. (See New Fortress Energy stock analysis on TipRanks)
New Fortress Energy expects completion of the Barcarena terminal and natural gas supply to begin in 2022.
Last month, Stifel Nicolaus analyst Benjamin Nolan repeated a buy rating for the stock and raised the target price from USD 50 to USD 58 (29.9% upside potential).
Recognizing the opportunity in Fast LNG for the company, Nolan said it would allow New Fortress to build a fixed-price LNG source in half the time compared to its competitors.
There is consensus on the streets that New Fortress Energy is a moderate buy based on 2 buys and 2 holds. Analyst average target price of $ 54.75 implies upside potential of 22.6%. The shares gained around 316.2% in the past year.
Source: Smarter Analyst