Regasification specialist Excelerate Energy is seeing an uptick in LNG spot purchases as prices fall and anticipates good demand in the second half of 2023.
In a very short results briefing, company president and chief executive Steven Kobos said benchmark LNG prices have declined when compared to the highs of 2022.
He said this has allowed countries like Argentina Bangladesh and other Asian-Pacific buyers to resume spot cargo purchases in the first quarter of this year.
“Although the macro drivers vary between regions, we expect to see healthy global demand for LNG in the second half of 2023,” he said.
Kobos demand for FSRUs in Europe is being driven by countries that prioritise energy security ahead of the upcoming winter.
The CEO said a milder-than-expected winter has resulted natural gas inventories remaining at levels above historical averages.
He said current gas inventories in Europe are at about 60% compared to averages of approximately 45% over the last eight years.
As Europe prepares for the coming winter, he said the European Commission the region is targeting to restock these to around 90% capacity by 1 November.
Kobos updated on its planned Payra LNG import project for Bangladesh for which he said the company is currently working with state importer Petrobangla on a term sheet and a long-term sales and purchase agreement.
He revealed that Excelerate recently signed a mandate letter with an international multilateral for a significant portion of the debt required for the project.
Excelerate chief commercial officer Daniel Bustos said the company is currently working on several parallel work streams for the project.
Bustos said the onshore pipeline is going to be one of the critical elements for the project. He said LNG demand in Bangladesh keeps growing and the government has asked Excelerate to optimise the onshore route of the pipeline to access a larger market for the project at potentially an earlier stage.
He said a date for a final investment decision on Pyra would become clearer once the term sheet has been exercised.
Kobos said Excelerate’s FSRUs in Bangladesh are supplying around 20% of the country’s energy supply. He said since it first introduced LNG to the country in 2018 the government has cancelled plans for numerous coal-fired power plants.
He detailed that the company had been selected this week to supply a second spot cargo of LNG to the country.
Kobos said Excelerate’s priorities are to operate a profitable and growing fleet of FSRUs, grow its existing regasification business, expand its downstream gas customer base in existing markets, enter new markets and managing a diversified portfolio of LNG supply.