Europe’s energy crisis is likely to “influence the LNG supply and demand balance through the end of this decade and beyond,” according to Excelerate Energy Inc. CEO Steven Kobos.
But beyond import terminals in Europe, Excelerate also is maintaining long-term focus on the continued strength of its South American liquefied natural gas business. Three of Execerlate’s floating storage and regasification units (FSRU) are deployed in South America, where it has been providing seasonal regasification services since 2008. Two vessels are in Brazil and another is in Argentina.
The FSRU Excelsior was set to depart the Bahia Blanca GasPort terminal in Argentina and move to Germany early this year. However, Excelerate and the German government adjusted the charter. The vessel is to stay in Argentina through the South American heating season and arrive in Germany sometime after August.
Argentina’s Vaca Muerta natural gas pipeline is expected to come online this June, ending the need for LNG imports.
“Justifiably, Europe dominates energy security headlines,” Kobos said in a recent earnings call. “However, South America is also facing significant gas supply disruptions…In the case of South America, this is driven primarily by the rapid decline of Bolivian natural gas sales to both Brazil and Argentina.”
Integracion Energetica Argentina launched a tender last week to buy five cargoes in May, according to data from Kpler. Argentina imported 1.6 million tons of LNG last year.
In the long-term, Kobos said Excelerate’s partnership with Brazil’s state-owned Petróleo Brasileiro SA, aka Petrobras, is to enhance the country’s energy security. The company services Brazilian gas sales through the FSRU Sequoia, which it has been renting from Maran Gas Maritime Inc. since 2020.
Earlier this month, Excelerate gave notice to Maran that it intended to purchase the Sequoia for $250 million with proceeds from a recently closed credit amendment. The firm estimated it could close the purchase by mid-April.
Global Focus
Excelerate is looking for more opportunities to grow its nascent LNG portfolio as it expands its role as a global natural gas supplier.
Kobos said the company, headquartered in The Woodlands near Houston, had pivoted its “near-term commercial strategy” to FSRUs to help meet energy security concerns in Europe and it also has progressed plans to become a LNG supplier. Last month, it obtained a 20-year, 0.7 million metric ton/year sales and purchase agreement with Venture Global Inc.
Supply from the Louisiana export project is a cost-effective entry point to “secure future gas sales,” Kobos said. However, the company is “agnostic” about where it is searching for additional volumes.
“We have global ambitions. And while we may very well wish to source additional U.S. volumes, we want a diversified LNG supply portfolio,” he told analysts.
Excelerate has long-term and seasonal commitments for its global fleet of nine FSRUs in the United States, as well as the Middle East, South America and most recently Europe.
The firm landed a five-year charter with the German government for the FSRU Excelsior last year. The FSRU Exemplar was delivered to Finland in December for a 10-year charter at the Port of Inkloo.
Excelerate also sold a commissioning cargo to Finland. Kobos called the cargo an “important first step” toward supplying Baltic countries “through our Finnish gas marketing entity.” Additional “integrated opportunities” are in the queue for other parts of Europe.
Excelerate reported 4Q2022 net income of $33.9 million (25 cents/share). Full-year net income was $80 million (51 cents/share), compared with $41.2 million in 2021, when the company was private.
