Excelerate to supply two more spot LNG cargoes to Bangladesh

US FSRU player Excelerate Energy will deliver two more spot liquefied natural gas (LNG) cargoes to Bangladesh in the third quarter of this year.

Earlier this year, Excelerate won tenders for two spot LNG deliveries to Bangladesh.

The firm said in its second-quarter report issued late on Wednesday that it delivered two spot cargoes during the quarter to the country.

“Year-to-date, Excelerate has secured four Bangladesh spot LNG cargo tenders, equating to approximately 250,000 tons of LNG,” Excelerate said.

The third and fourth cargos are expected to be delivered in the third quarter of 2023, the firm said without providing any additional information.

Excelerate sold four spot LNG cargoes to Bangladesh in 2021, and all of these shipments were sourced from the US.

Bangladesh returned to buying spot LNG in February this year since a government decision in July 2022 to halt purchases due to high prices.

Spot prices dropped significantly when compared to the last year. The JKM LNG price for September settled at $11.030 per MMBtu on Wednesday.

LNG supply deal

Bangladesh currently imports LNG via its first LNG import facility, Moheshkhali Floating LNG or MLNG, operated by Petrobangla, and via Summit Group’s FSRU-based terminal.

Both of these facilities feature Excelerate’s FSRUs.

In addition to these facilities, Excelerate is also working on another FSRU-based facility in Bangladesh.

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 Petrobangla.

The company said in its quarterly presentation that it is “awaiting for final approval” for the Petrobangla SPA.

Recent local media reports in Bangladesh suggest that Excelerate would sign a 15-year deal with Bangladesh for 1 to 1.5 million tonnes of LNG per year staring in 2026.

Earlier this year, Excelerate signed a 20-year deal to buy 0.7 mtpa of LNG on a free on board (FOB) basis from Venture Global’s Plaquemines LNG facility in Plaquemines Parish, Louisiana.

Higher FSRU rates boost earnings

Excelerate reported a net income of $29.6 million for the second quarter. This compares to a loss of $4 million in the same quarter last year and a net income of $30.7 million in the prior quarter.

The company’s revenue dropped to $432.4 million compared to $622.9 million last year but it rose compared to $211.1 million in the prior quarter.

Adjusted Ebitda reached $88.6 million a rise from both $66.5 million in the same quarter last year and from $79.9 million in the prior quarter.

Excelreate said its net income and adjusted Ebitda increased over the prior year primarily due to higher rates on charters in Finland and Argentina, a contract extension at a higher rate in the UAE, and lower operating lease expense resulting from the acquisition of the FSRU Sequoia.

The increase in the company’s net income was also driven by the early extinguishment of the FSRU Excellence finance lease liability as part of the vessel acquisition in 2022, it said.

In May, the FSRU Excelsior started seasonal regasification services at the Bahia Blanca GasPort terminal in Argentina.

The unit is expected to provide regasification services for the duration of the Argentine winter season and will return to the Germany charter in the third quarter of 2023.

“Strong” results

Excelerate now expects adjusted Ebitda to range between $325 million and $335 million for the full year 2023.

Maintenance capex for 2023 is expected to range between $20 million and $30 million.

“The strong financial results we delivered in the second quarter of 2023 are a testament to the steady performance of our core regasification business and the demand for FSRUs around the world,” president and CEO Steven Kobos, said.

“With global markets continuing to emphasize the need for energy security, the value of our services has never been greater,” he said.

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