Fiscal Board extends Genera PR’s LNG contract amid safety and supply concerns

Genera PR’s Vice President of Environment, Health, and Safety and Regulation Ricardo Palléns Cruz.

By THE STAR STAFF

The Financial Oversight and Management Board (FOMB) has approved an extension of the contract between Genera PR and NF Energía, LLC for the supply of liquefied natural gas (LNG) to Puerto Rico’s temporary generation facilities.

The contract, now extended through October 10, 2025, remains capped at $70.96 million.

In a letter sent last week to Ricardo Palléns Cruz, Genera PR’s Vice President of Environment, Health, and Safety (EEHS) and Regulation, the FOMB acknowledged that NF Energía is currently not supplying LNG as required, forcing Units 5 and 6 at San Juan, as well as megagenerators at Palo Seco and San Juan, to operate on diesel fuel. The Board described the situation as “extremely concerning,” warning that it puts essential services at risk.

The contract originated on July 17, 2025, following an exigency declaration by Genera due to delays in the LNG procurement process, low reserve margins, and hurricane season threats. Since then, the FOMB has approved ten amendments, each increasing the contract’s budget and extending its term. The latest amendment—the eleventh—extends the contract without increasing its budget.

Complicating the LNG supply issue is a federal court order issued on September 26, which remains in effect until October 10. The order requires NF Energía to use four specialized 80-ton tugboats for all LNG-related operations in San Juan Bay, citing safety concerns.

The court action stems from a lawsuit filed by San Juan Bay pilots, who argued that New Fortress Energy (NFE)—NF Energía’s parent company—had endangered maritime safety by eliminating the use of specialized tugboats. The pilots cited two years of technical simulations and formal agreements confirming that large LNG tankers, which carry up to 155,000 cubic meters of gas, can only be safely maneuvered with the specified tugboats.

Since March, pilots have successfully conducted 18 LNG maneuvers using the approved equipment. However, NFE terminated its contract with Edison Chouest Offshore, the owner of the specialized vessels, and replaced them with local tugboats lacking proper validation.

On October 2, a federal judge denied an emergency motion filed by the Puerto Rican government, which sought to intervene in the dispute between NFE and the pilots.

The FOMB’s approval of the contract extension aims to ensure LNG supply continuity once NF Energía resumes operations at the San Juan terminal. The Board has requested that Genera and the Puerto Rican government report all measures taken to enforce the contract’s terms, particularly regarding the supplier’s failure to deliver LNG.