US-listed Excelerate Energy is considering buying existing LNG vessels and newbuildings under a new growth strategy.
President and chief executive Steven Kobos, who was speaking on a results call, said at the start of 2024 that Excelerate’s core 10-vessel floating storage and regasification unit fleet is fully contracted.
He said revenue from the regas fleet grew by about 14% in 2023 year-on-year with over 15 years of contract length added.
“We also plan to grow our fleet through an asset growth plan that includes selective acquisitions and construction of new vessels,” Kobos said, without giving further details.
The company will take delivery of a lone 174,000-cbm FSRU newbuilding from HD Hyundai Heavy Industries in June 2026.
Kobos split Excelerate’s near-term growth strategy into three areas.
First, he said the company plans to invest in its existing assets to ensure these will continue to operate at high levels of reliability and contribute to earnings.
Second, Excelerate is also planning to evaluate potential equity investments in LNG regasification terminals, downstream natural gas infrastructure and execute long-term sale and purchase agreements.
On the terminals, Kobos elaborated that these could be either existing facilities or infrastructure that is under construction, and he said the company is driving to close deals that could provide returns by 2025.
Third the company is implementing a $50m share repurchase programme which will kick off this quarter.
Kobos slammed Excelerate’s share price, which he described as trading at “substantially below the company’s value”.
He cited the fair market value of the company’s assets, its fixed-term FSRU contracts and near-term capacity for growth.
The CEO said: “This is why we believe that implementing a share repurchase program at this time is the right thing to do.”
He referenced the “sustained tightness” of the FSRU market as creating opportunities for Excelerate.
Asked by analysts why the company is pursuing growth along with the share buyback, Kobos said the company believes it can do both.
But he added: “First and foremost in our mind is the ability to pursue growth.”
