US floating LNG player Excelerate Energy is looking to order another floating storage and regasification unit (FSRU), the company’s executives said during the third-quarter earnings call on Thursday.
Excelerate currently operates ten FSRUs, one of the world’s largest fleets of such vessels, and these units are located around the globe, including in Europe, Brazil, Bangladesh, and Pakistan.
The firm also ordered one 174,000-cbm FSRU at South Korea’s Hyundai Heavy Industries last year.
Excelerate will pay about $332 million for the vessel which is scheduled for delivery by June 2026.
Asked about the company’s allocation strategy going forward, Excelerate’s finance chief, Dana Armstrong, told analysts during the call the company is not intending to increase its dividend at this point of time as it is “focused on growing the business and using that capital to fund our growth.”
“As you know, we have a newbuild coming out very soon. So we’ll be working on the financing around that. We are considering potentially placing an order for a second newbuild to fund additional growth. So that’s really where our priorities are at this time,” she said.
Armstrong did not provide any additional details regarding the potential FSRU order.
Over $4 billion of future contracted cash flows
Excelerate reported net income of $46.5 million for the third quarter and adjusted Ebitda of $106.9 million.
The firm raised 2023 adjusted Ebitda guidance to between $340 million and $350 million.
Excelerate just signed a 15-year LNG supply deal with Bangladesh’s state-owned Petrobangla.
Under the SPA, Petrobangla has agreed to purchase 0.85 to 1 million tonnes per annum of LNG from Excelerate beginning January 2026.
In addition, the US firm recently signed a deal with Brazil’s state-owned energy firm Petrobras to charter the 2020-built FSRU Sequoia for ten years.
Including the new charter, Excelerate’s FSRU and terminal services portfolio has grown to over $4 billion of future contracted cash flows.
“Most profitable” time charter party
CEO Steven Kobos said during the call that this deal with Petrobras is a “great” deal and “really important” to Excelerate, and it is “better then anybody is getting in Europe.”
Armstrong said that the company is expecting “our Ebitda in the mid-$60 million range over the near term.”
“And that’s going to increase over time because of the CPI escalator, so it’s a very solid, profitable contract for us,” she said.
This is probably “our most profitable TCP (time charter party) that we have,” Armstrong said.