Wall Street analysts are buzzing about New Fortress Energy's (NFE) latest earnings call, focusing on their operational successes in Brazil and Puerto Rico. But there's something lurking beneath the surface, a hidden advantage whispered by CEO Wes Edens that has the potential to transform NFE from an undervalued gem into a market-dominating force: The power of time.

Edens, in his characteristically blunt style, casually dropped a bombshell during the Q4 2023 earnings call, highlighting the immense barrier to entry created by NFE's strategically positioned terminals. He pointed out that replicating their success in Brazil would require a "time machine" - a tongue-in-cheek reference to the eight years it took to develop their now operational terminals in Barcarena and Santa Catarina. This seemingly offhand comment reveals a potent truth: in the rapidly evolving energy landscape, time is the ultimate currency.

Analysts are busy crunching numbers, forecasting potential EBITDA growth from fuel switching in Puerto Rico and upcoming power auctions in Brazil. But they seem to be missing the larger point - the sheer difficulty of building competing infrastructure in a timely manner. While anyone can theoretically amass the capital to construct a terminal, the regulatory hurdles, permitting processes, and sheer logistical complexity can stretch development timelines to years, if not decades.

NFE, with their terminals already operational, has leapfrogged this time barrier. They are positioned to capture immediate downstream demand in a market starved for reliable, clean energy. The Brazilian government, recognizing the urgent need for firm capacity to support its booming renewable energy sector, is actively seeking solutions. NFE, with its ability to provide instant gas supply, holds a distinct edge in upcoming power auctions.

Brazil's Growing Need for Firm Power Capacity

Brazil forecasts an enormous need for dispatchable power by 2032, driven by the growth of renewables and rising energy demand. NFE is strategically positioned to capitalize on this opportunity with its operational terminals.

NFE's Terminal Network: A Snapshot of Growth Potential

To quantify the time advantage, let's delve into the numbers. NFE's current market capitalization hovers around $5 billion. Their Brazil operations, with $500 million in contracted EBITDA by 2027, alone represent a significant portion of that value. Adding the potential upside from upcoming auctions and additional gas supply contracts, the Brazil business alone could easily reach a valuation surpassing NFE's current market cap.

This doesn't even account for the potential of Puerto Rico, or the ripple effect of FLNG 1 and 2 coming online. With minimal equity CapEx needed going forward, NFE's distributable cash flow will surge, allowing for aggressive debt reduction and potentially boosting their credit rating - all factors that further solidify their competitive advantage.

While analysts are right to be excited about NFE's operational wins, they seem to be missing the bigger picture. The "time machine" effect is a powerful force that could rapidly reshape the LNG landscape, and NFE is holding the keys. The question isn't whether they can capitalize on the growing demand for clean energy - it's how quickly the market will wake up to their strategic brilliance.

"Fun Fact: NFE's first Floating Liquified Natural Gas (FLNG) unit, set to be operational in March 2024, will be the fastest large-scale LNG project ever developed. This highlights NFE's commitment to rapid innovation and its ability to overcome logistical challenges."