The Financial Oversight and Management Board approved Genera PR’s proposed fuel supply contract renewal with Novum Energy Trading Inc. in a letter dated October 16, approving it with observations. Novum agreed to deliver fuel through an alternative terminal arrangement that reduces reliance on Genera-controlled infrastructure and addresses concerns that had limited competition in Puerto Rico’s fuel procurement.
Under the three-year agreement, valued at up to $2 billion, Novum will supply some 6 million barrels annually of No. 6 fuel oil to the Puerto Rico Electric Power Authority’s Aguirre, San Juan, Palo Seco and Costa Sur plants. The contract stems from a competitive procurement Genera launched in April and replaces the current agreement.
The board said Novum submitted the most competitive proposal among three bidders and earned the highest evaluation score. A central factor was Novum’s plan to use San Juan Dock D and an existing manifold connecting Docks C and D, allowing deliveries even when Dock C is occupied. Novum backed its plan with a Terminal Access Plan Support Agreement executed October 5 with dock operator Luis A. Ayala Colón Sucrs.
Inc. Novum’s fixed differential of $3.33 per barrel under a 60-day payment structure is $1.42 lower than the current $4.75, about a 30% reduction. Genera must keep terminal access available throughout the term and coordinate deliveries with other port users, including New Fortress Energy’s LNG operations. The contract may be extended one year by mutual agreement, and Genera may buy up to 25% of its fuel from alternative suppliers when cheaper fuel is available.