Excelerate inks deal with Hyundai Heavy for newbuild FSRU

US floating LNG player Excelerate Energy has signed a letter of intent with South Korea’s Hyundai Heavy Industries for a newbuild floating storage and regasification unit (FSRU).

Excelerate revealed this in its second-quarter results presentation, but it did not provide any additional information.

CEO Steven Kobos said during the company’s results call later on Thursday that the 170,000-cbm FSRU would be delivered in 2026.

“This new FSRU would be a critical tool used to support the execution of our integrated projects,” he said.

Kobos said that the company would also discuss an optional vessel as part of the shipbuilding contract with Hyundai Heavy.

Excelerate took delivery of its latest and the tenth FSRU, Excelerate Sequoia, from South Korea’s Daewoo Shipbuilding and Marine Engineering in June 2020.

FSRUs are in great demand as European countries look to fast-track LNG imports and slash reliance on Russian pipeline gas.

Excelerate already chartered its 150,900-cbm Exemplar to Finland’s Gasgrid for a period of 10 years. This FSRU should start work in the fourth quarter of this year, Excelerate confirmed in its quarterly report.

The US firm also plans to deploy its FSRU Excelsior to serve the Vlora LNG project in Albania after the unit completes its contract in Israel.

Bangladesh expansion

Bangladesh has two FSRU-based LNG import terminals, both served by Excelerate’s vessels.

The 138,000-cbm Summit LNG FSRU, located offshore Moheshkhali Island in the Bay of Bengal, completed its 100 STS transfer on March 25.

In August 2017, Summit entered into a 15-year charter agreement with the US floating player for the FSRU. Excelerate’s FSRU began operations at the facility in April 2019.

Excelerate’s FSRU also serves Bangladesh’s first LNG import facility, Moheshkhali Floating LNG or MLNG, operated by Petrobangla.

Launched in 2018, the 138,000-cbm FSRU Excellence completed its 100th STS transfer offshore Bangladesh last year.

Excelerate said in its quarterly report that it continues to advance commercial negotiations with the government of Bangladesh for the expansion of the MLNG terminal, the extension of its existing regasification agreement by five years to 2038, and a multi-year LNG supply agreement.

The expansion project was approved in principle by the government of Bangladesh last quarter.

In addition to this development, Excelerate is advancing talks with Bangladesh for the Payra LNG project.

The proposed scope of the Payra LNG project, which is located in the southwestern part of the country, involves the development of an offshore FSRU import terminal and an onshore pipeline to the city of Khulna.

As part of the project, Excelerate is also negotiating a long-term LNG supply agreement with the country.

In August, Excelerate formally engaged HSBC as its financial advisor to support various financial aspects of the Payra project, it said in the report.

(Article updated to add more information regarding the newbuild FSRU.)

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