US-listed floating storage and regasification specialist Excelerate Energy plans to build up its own LNG supply portfolio as it expands its offering to customers globally.
Speaking on the company’s fourth-quarter results call president and chief executive Steven Kobos flagged up Excelerate’s sales and purchase agreement (SPA) for 0.7 million tonnes per annum of LNG over 20 years from US producer Venture Global LNG.
“This SPA is the first long-term LNG supply agreement in our companies history,” Kobos said. “This transformational agreement supports our plan to vertically integrate our business and become the virtual pipeline for the world.”
Asked about the company’s preference for sourcing further LNG volumes, he said: “We have a global footprint. We have global ambitions and while we may well wish to source additional US volumes we want a diversified LNG supply portfolio and that's why we continue discussions with suppliers around the world.
“We are determined that if we build this diversified LNG supply portfolio ... it is going to allow us to offer more flexible cost-effective products to existing and new customers,” he said.
Kobos described Excelerate as “somewhat agnostic” on the geography of supply.
“We're going to keep our eyes open for opportunities that make sense and are accretive around the world,” he said.
Kobos said Excelerate is currently marketing its lone FSRU newbuilding — which delivers in 2026 — as “part of an integrated infrastructure offering”, without providing further details.
Since 2022 this includes Europe, a region which he said Excelerate expected to influence the LNG supply and demand balance through the end of this decade and beyond.
Kobos said that following Russia’s invasion of Ukraine in February 2022, Excelerate “quickly pivoted” its near-term focus to Europe adding Finland and Germany to its customer base.
He said that with its new FSRU presence in Europe, the company has the opportunity to expand its gas marketing business in the region.
Kobos was at pains to point out Excelerate’s activities outside Europe.
He said three of the company’s 10 FSRUs are working with long-time partners in South America, with two serving in Brazil and one in Argentina.
Kobos said Excelerate has signed a seasonal agreement on its 138,000-cbm Excelsior (built 2005) under which the ship’s five-year charter to the German government is suspended while the vessel shifts to Bahia Blanca in Argentina to serve the winter market there.
The vessel is due to “snap back” and resume its German contract in the third quarter, Kobos said.
Chief financial officer Dana Armstrong said the deal will provide a $5m to $6m uplift to Excelerate.
Kobos said that while Europe dominates energy security. But he said South America is also facing supply disruption with Brazil and Argentina suffering from the decline in Bolivian pipeline gas supplies.
The CEO said in the Asia-Pacific region every country with a coastline has plans to introduce or expand LNG usage in their energy mix due to expanding economies, moves to decarbonise and the decline of domestic supplies.
In Bangladesh, he said Excelerate sold a spot LNG cargo to PetroBangla last week.
He said the Bangladesh government plans to sign long-term LNG supply contracts in 2023.
Kobus said Excelerate is moving towards having prepared term sheets for its long-planned Payra LNG project on which it has already invested some $5m.
He said the import project has the potential to double Bangladesh’s LNG supply.
