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FOMB reviews long‑term New Fortress LNG deal amid concerns about exclusivity and noncompetitive terms
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Summary
Members pressed the Financial Oversight and Management Board about a long‑term liquefied natural gas contract with New Fortress Energy, and the board said it is still reviewing the agreement and flagged possible exclusivity and take‑or‑pay provisions that could limit competition and raise costs.
Members of the House Subcommittee on Indian and Insular Affairs questioned the Financial Oversight and Management Board (FOMB) about a proposed multi‑year liquefied natural gas (LNG) supply contract with New Fortress Energy and a unit referred to in testimony as Genera, focusing on whether the agreement was negotiated competitively and whether it creates exclusivity that could raise costs for Puerto Rico.
Representative Suzanne Bonamici/Representative Deanne (?: transcript participant Miss Hoyle) raised a report that New Fortress refused to deliver an LNG shipment during contract negotiations and asked the board to explain. Robert Mujica, executive director of the FOMB, said the board is reviewing multiple contracts and that some provisions raise “market competition” concerns: the contract in question appeared to grant broader exclusivity for LNG supply than existing port arrangements, included take‑or‑pay volume commitments and contained volumes that may be tied to future generation assets not yet built.
Mujica said the board has sought more time to review contract terms and has interviewed negotiators; based on those interviews staff reported that negotiators faced pressure and limited flexibility in changing terms. “If the facts as reported to us are true, that would be a despicable act against the people of Puerto Rico to deny them the fuel they would need,” Mujica testified, describing reports that deliveries were conditioned during negotiations.
Members asked whether a competitively run procurement would likely yield better terms. Mujica said the board believes a fair, transparent process could produce more favorable terms and more market competition. He declined to say the board had voided the contract; later in the hearing he clarified that the board was still reviewing the agreement and had not issued a final determination.
The board said it will continue its review, consult with negotiators and calibrate oversight to ensure that contracts support affordable, reliable generation and do not create monopolistic supply arrangements that could lock in high take‑or‑pay obligations and crowd out other suppliers.
