Excelerate diverts Germany-chartered FSRU to Argentina for seasonal contract

March 29, 2023
The LNG infrastructure company is forecasting 2023 EBITDA growth of 8-15%.

Excelerate Energy Inc., Houston, signed a regasification services deal with Argentine officials that commits one of its floating storage and regasification units (FSRU) to the South American country during its winter.

Excelerate, which operates 10 FSRUs around the world, will in coming weeks redeploy its Excelsior vessel that is being chartered by the German government to the Bahia Blanca GasPort terminal through midyear. The vessel will then return to Germany and start a 5-year contract that was signed last fall (OGJ Online, Oct. 25, 2022).

Excelerate president and chief executive officer Steven Kobos said on an earnings call that Argentina is one of the company's valued markets. "Our actions in South America underscore our longstanding commitment to regional energy security and to meeting the changing energy needs of our customers," he said. 

The recently signed Argentina agreement, which Kobos said came together partly because Bolivian natural gas sales have declined, will give Excelerate a financial boost: chief financial officer Dana Armstrong told analysts Mar. 28 the company’s EBITDA, which was $295 million in 2022, should grow by $5-6 million this year thanks to the deal. On the whole, Kobos and Armstrong expect EBITDA to grow to $320-340 million this year.

In fourth-quarter 2022, Excelerate produced a net profit of $33.9 million on revenues of $455 million. Its FSRU and terminal services sales ticked up 6% from third-quarter 2022 to $122 million, helping grow its gross margin to $80.2 million.

In addition to the Argentina work and Excelerate’s focus on Europe following Russia’s invasion of Ukraine, Kobos said the company also remains focused on growing in Asia-Pacific countries [APAC], “where almost every country with a coastline” is investing in LNG capacity. It’s early days in many ways, he added, but demand has remained strong of late and he said that Excelerate signed a spot contract to Bangladesh’s PetroBangla last week.

“You’re seeing the appetite to get as much LNG as they can once prices have moderated,” Kobos said. “We do think the lessons learned from 2022 in the region, in general, are that they need to enter into longer-term pricing [and] acquire those molecules. […] We are scouring the region because people are starting to think about what comes next and I assure everyone that LNG is still vitally part of the mix in APAC.”

Shares of Excelerate (Ticker: EE) climbed 8% to $21.27 on Mar. 28 following earnings results, but gave up a ground the next day. The company went public nearly a year ago—it was the first new NYSE listing after Russia’s invasion of Ukraine—at $24/share. The company now has a market capitalization of about $2.3 billion.