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Stabilis currently owns a liquefier that can produce more than 100,000 LNG gallons per day in George West, Texas and a liquefier that can produce up to 30,000 LNG gallons per day in Port Allen, Louisiana.
Last year, the company secured a multi-year contract from cruise operator Carnival to provide LNG fuel for the latter’s newest vessel Carnival Jubilee.
Ballard said during the company’s second-quarter results conference call on August 8 that the contract began late in the fourth quarter of 2023 and contributed to the improvement plant utilization rate at the George West liquefaction facility.
“We are delighted to have an established relationship with a world-class cruise operator like Carnival and viewed Galveston and the surrounding region as an exciting area for continued marine bunkering expansion on the waterfront,” he said.
“To that end, over the last year, we have been actively developing plans to build the first dedicated waterfront LNG bunkering facility along the US Gulf Coast,” Ballard said.
“Thanks to our successful track record of developing and operating greenfield liquefaction plants, our team of experienced industry experts and the key components of the liquefaction train that we purchased in 2023, we feel that we can rapidly build and commission the first phase of our expansion once we make the final investment decision to proceed over the next few months,” he said.
He said expansion in this market is a “natural extension” of the company’s existing Texas LNG fueling operations.
According to Ballard, the company is “well positioned” to capitalize on the growing demand for LNG fuel from maritime industry beyond the Gulf Coast, and will continue to actively evaluate opportunities to expand its operations to strategic ports across the entire US.
LNG bunkering contracts
Ballard said the company needs additional contracts to get this LNG bunkering project to the finish line.
“We certainly don’t want to put capital to work with a 100 percent merchant risk. We certainly believe in not only that market, but a wide array of markets around the US and certainly have an appetite for some merchant risk,” he said.
“But having an anchor or two and not only that, but each market, certainly, we think, makes all the sense in the world, and we would expect to have some commercial activity that’s on the books before we truly reach an FID, but not 100 percent. Where that balance point is to be determined,” Ballard said.
He said the company is in “advanced discussions with a variety of, we think, very strong interesting counterparts to partner with us to anchor that expansion, certainly in Galveston. But as I mentioned, not just unique to Galveston, but also in other ports in the US.”
During the second quarter, Stabilis also started a phased expansion that will more than double its storage capacity at the George West facility from 270,000 gallons to 630,000 gallons.
“The expansion will grow our robust LNG supply and logistics network across the Gulf Coast region and will give us added flexibility to support the continued expansion of our supply and logistics network,” Ballard said.