NFE cites Energy Bureau order as current dispute preventing gas delivery
By THE STAR STAFF
A spokesperson for New Fortress Energy (NFE) announced on Sunday that the fuel supplier will not deliver liquefied natural gas (LNG) from the tanker ship Amur River.
The decision stems from a dispute regarding the resolution and order issued on Sept. 30 by the Puerto Rico Energy Bureau (PREB), which directed the Puerto Rico Electric Power Authority (PREPA) to halt a $17.6 million payment to the company.
“The vessel’s arrival was scheduled for today, and we had made the necessary arrangements to receive it and supply natural gas to Puerto Rico. We remain ready and willing to fulfill our obligations. However, a recent order from the Energy Bureau has created uncertainty regarding payments for the natural gas we supply under the terms of the contract,” a company spokesperson stated in a written release. “PREPA itself has requested clarification on how that order should be applied. We are working to address this matter, the resolution of which requires the intervention of the relevant authorities.”
The dispute centers on the resolution and order dated Sept. 30 (Docket No. NEPR-MI-2020-0001), titled “Determination on Quarterly Adjustment Clause Factors for the October-December 2026 Period.”
On page 5, “the Energy Bureau ORDERS the Authority to withhold within the electrical system any amount that, pursuant to the corresponding evaluation, may be deducted, offset, or withheld from payments to said supplier. This directive shall begin with the approximately $17,649,888.46 subject to this Resolution and Order and shall extend prospectively to any future amount subject to similar mechanisms.”
The PREB will not authorize the disbursement of funds corresponding to supply deficiencies or non-compliance attributable to the supplier itself, nor funds where the basis for payment or liability remains in dispute.
Prior to this situation -- for the previous 14 days -- the tanker vessel had been unable to dock due to disputes regarding its size, handling by San Juan’s harbor pilots, and the guarantees required by the U.S. Coast Guard to carry out the operation.
On Saturday, the Coast Guard raised objections to the Amur River’s entry because the vessel’s dimensions exceed approved limits -- specifically regarding navigational maneuvers in the channels and the use of appropriate tugboats.
The Coast Guard has requested that NFE update its navigation data to reflect the ship’s actual dimensions, which surpass those previously authorized.
Public hearing scheduled regarding dispute
Also on Sunday, it was announced that the executive director of the Ports Authority, the San Juan Bay Pilots Association, and NFE management have been summoned to appear on Tuesday before the House of Representatives’ Committee on Transportation and Infrastructure. They are to explain, under oath, the disruption in the supply of LNG.
The hearing is scheduled for 9 a.m. in Hearing Room 6.
The announcement was made by the committee chairman, San Juan District 3 Rep. José “Cheito” Hernández Concepción.
“This is a critical issue for Puerto Rico. The use of Bunker C diesel in Units 5 and 6 of the San Juan Power Plant increases generation costs and, consequently, the electricity bills paid by our people,” the lawmaker said in a written statement. “For nearly two weeks, those units have been using diesel instead of LNG because the vessel ‘Amur River’ has been unable to enter San Juan Bay. This is unacceptable, and someone must be held accountable. That is why everyone must provide an explanation under oath.”
“Harbor pilots have safety protocols for the entry of vessels carrying natural gas. The same applies to the U.S. Coast Guard, which recently -- this past weekend -- raised serious concerns regarding the ‘Amur River’ vessel and the safety of San Juan Bay,” Hernández Concepción added. “The Committee will hear those arguments, just as we will hear from NFE and the Ports Authority regarding their roles in this situation.”
“We also want to understand the terms of the contract between NFE and the Puerto Rico Ports Authority regarding the use of piers A, B, and C in San Juan Bay,” he continued. “This contract has been the subject of much speculation in recent weeks due to the situation involving the ‘Amur River.’ I have spoken with the Chairman of the Federal and Veterans Affairs Committee, my colleague José Aponte, about launching a detailed study of that contract to determine how it can best serve Puerto Rico.”
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