New Fortress Energy LLC, an integrated gas-to-power LNG company formed by Fortress Investment Group, launched an IPO on Jan. 14 with plans to raise $400 million.

In the proposed IPO, New Fortress plans to offer 22.2 million shares priced between $17 and $19 per share. The company also intends to grant a roughly 3.3 million greenshoe option as part of its offering.

At the midpoint of the proposed price range, New Fortress would command a fully diluted market value of $3 billion, according to a report by global IPO investment adviser Renaissance Capital.

New Fortress, based in New York, is looking to capitalize on a growing supply-demand gap by developing LNG assets particularly in areas with significant “stranded” natural gas reserves.

“We believe that the world is ‘long’ gas and ‘short’ power and that natural gas is a compelling fuel for power production,” the company said in its S-1 filing initially filed with the U.S. Securities and Exchange Commission (SEC) in early November.

However, because much of the world’s natural gas reserves are not directly connected by pipeline to electricity producers and other end users, New Fortress believes converting this “stranded” natural gas to LNG is an efficient way to satisfy the world’s large and growing power needs.

New Fortress said its business model is simple yet unique for the LNG industry, spanning the entire production and delivery chain from natural gas procurement and liquefaction to logistics, shipping, terminals and conversion or development of natural gas-fired generation.

“We aim to deliver targeted energy solutions to customers around the world, thereby reducing their energy costs and diversifying their energy resources, while also reducing pollution and generating compelling margins,” the company’s SEC filing said.

New Fortress Energy Asset Map (Source: SEC filings by New Fortress Energy)

Upon its launch in 2014 by company founder Wesley R. Edens, New Fortress built Florida’s first LNG production facility and, soon after, invested significant funds in Jamaica to deliver the country’s first LNG, according to the company website.

New Fortress’ S-1 filing said it is currently developing two liquefiers in the Marcellus area of Pennsylvania, each of which is expected to have the capacity to produce roughly 3 million to 4 million gallons of LNG per day or the equivalent of 250,000 to 350,000 million British thermal units per day. The company intends to develop five or more additional liquefiers over the next five years.

On the logistics side, New Fortress expects to own or control the assets necessary to deliver LNG to its customers through a “logistics pipeline.” Tanker trucks will transport LNG from its liquefiers to a port on the Delaware River for Marcellus-sourced LNG or the Gulf of Mexico for Midcontinent-sourced LNG, at which point LNG will be transloaded directly to large marine vessels.

New Fortress currently has long-term charters for both large-scale floating storage units, floating storage and regasification units and smaller LNG carriers to transport LNG from ports to its downstream terminals for ultimate delivery to customers. Also, in addition to its current network of downstream terminals, New Fortress aims to build 10-20 downstream terminals over the next five years, according to the SEC filing.

Morgan Stanley, Barclays, Citigroup and Credit Suisse are lead book-running managers for New Fortress’ proposed IPO. Additional book-running managers for the offering are Evercore ISI and Allen & Co. LLC. Co-managers are JMP Securities and Stifel.

The New Fortress shares will be listed on the Nasdaq Global Select Market under the ticker symbol “NFE.”

Emily Patsy can be reached at epatsy@hartenergy.com.

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