LNG

Excelerate Energy Inc., the specialist US company for LNG floating storage and regasification projects from South America to the Nordic region and South Asia, reported steady earnings after a quarter marked by further deals in Qatar and Brazil.

Argentina’s President-elect Javier Milei has offered the post of President and Chief Executive of state-owned energy company Yacimientos Petroliferos Fiscales (YPF) to Horacio Marín, an industry veteran and shale drilling expert who is a petroleum engineering graduate of the University of Texas.

Argentina is moving forward with more natural gas production both onshore and offshore with LNG market participant, the French major TotalEnergies, announcing the start of drilling at the Fenix gas field off the southern Argentine province of Tierra del Fuego.

Argentina said it was prepared to follow through with a pledge to remove investment uncertainties for foreign energy companies, especially in the construction of liquefaction natural gas export plants as the South American nation moves to develop its huge shale-gas reserves.

International companies including US majors see huge potential for Argentina from feed-gas brought to the coast from the huge Vaca Muerta shale basin containing one of the world's largest unconventional gas reserve.

Economy Minister Sergio Massa said in a speech to business leaders that the Government in Buenos Aires was preparing an LNG investment bill to send to Congress.

The Minister was accompanied at the event by the Secretary of Industry and Productive Development José de Mendiguren and the Secretary of Energy Flavia Royon,

Also present was Pablo González, President of Argentine state energy company Yacimientos Petroliferos Fiscales (YPF), which has various LNG development and shale gas and oil projects planned and had previously overseen the nation’s small-scale trial in LNG exports.

“If one looks at the reports of the most prestigious analysts in the energy sector, they envisage that in the next few years we are not only going to stop being importers of our energy, we are going to be a big player with our product,” declared Minister Massa

Protections

Massa said he hoped Congress would discuss the LNG Bill in the coming sessions. He stated that the Bill on investments in LNG plants was necessary to help the nation monetize its huge reserves and become a net energy exporter as import costs rise.

The Minister admitted that the consequences of the war in Ukraine had been having a big impact on Argentina’s energy import costs for all fuels and fertilizers.

“This final result of the year on the impact of the war shows us a negative balance of between US$3.70billion according to the IMF and US$5.20Bln, according to Argentina,” said Massa.

He said that Argentina must honour its commercial commitments just as the counter-parties must honour theirs.

Argentina has previously had the “Tango FLNG” production vessel at the Bahai Blanca port in Argentina to briefly be an LNG exporter.

The “FLNG Tango” vessel formally started its operations in Argentina in mid-2019 and a 10-year charter term began in September 2019 with Belgian shipping company Exmar.

The winter season then started in the Southern Hemisphere and liquefaction activities were stopped by YPF in May 2020.

Exmar first announced a YPF “force majeure” for the vessel on June 25, 2020, amid a dispute over various issues and the vessel departed.

“We need a great national agreement which in the next 30 years would bring core values ​​such as fiscal balance, competitiveness, accumulation of reserves and economic development with inclusion,” stated Massa.

The minister highlighted various possibilities whereby citizens and businesses had to advance with new measures that have “a full impact on the energy field and the knowledge economy” in Argentina.

Excelerate Energy, the leading US-based LNG terminal provider in the form of floating storage and regasification units, reported much improved third-quarter results and higher future earnings prospects as projects advanced for Germany and Finland.

Excelerate posted net income for the three months to the end of September of $37.3 million compared with $1.4M in the 2021 quarter.

Revenues for Excelerate in the quarter showed a more than four-fold increase to $803.3M versus $192.1M in the same period last year.

The Texas-based company later confirmed at the end of the quarter the start of the charter process for a project serving Finland and the Baltic state of Estonia.

The Texas-based company also signed a definitive agreement to deploy the FSRU “Excelsior” to Germany for five years.

Excelerate’s “Exemplar’ completed another winter season delivering LNG regasification services to Argentina and in August departed the port of Bahia Blanca and sailed to Europe for maintenance and winterization.

Finland project

The FSRU “Exemplar” was first delivered in 2010 and is 291 metres in length and with a beam of 43 metres and capacity of 151,000 cubic metres.

“Finland’s charter hire commenced in October and winterization upgrades for the ‘Exemplar’ are ongoing,” said Excelerate.

“The ‘Exemplar’ is currently undergoing customer-requested winterization upgrades during a technical stop at the Navantia shipyard in Ferrol (northwest Spain),” said Excelerate

Excelerate and Gasgrid Finland previously announced an executed 10-year, time charter party agreement for Excelerate to provide LNG regasification services, which are expected to commence in the fourth quarter of 2022.

For the German agreement, the “Excelsior” is expected to provide regasification services at Germany’s planned LNG import terminal being developed at the North Sea port of Wilhelmshaven by developer Tree Energy Solutions and the German and French utilities E.ON and Engie.

“Excelerate previously announced that the company and Engie signed a term sheet for the deployment of an FSRU to provide flexible and secure LNG regasification capacity for Germany as it continues to seek alternatives to Russian pipeline gas supply,” said Excelerate.

The US company also recently ordered an FSRU newbuild from Hyundai Heavy Industries of South Korea to be set for hire in the second quarter of 2026.

Earnings overview

The company’s adjusted earnings increased over the prior quarter due to lower idle fuel costs, lower repair and maintenance expenses and higher margins from the Bahia Blanca seasonal charter in Argentina.

Excelerate said this was partially offset by an increase in expenses primarily driven by higher consulting costs to support the company’s transition to a public company structure, along with higher spending related to business development and marketing activities.

“Excelerate delivered another great quarter, demonstrating the strength of our flexible business model against the backdrop of the most significant energy market disruption in decades,” said President and Chief Executive Steven Kobos.

“We are successfully executing our strategy to deploy our flexible LNG infrastructure and pursue downstream opportunities to expand our reach in both new and existing markets,” added Kobos.

“Our portfolio approach to managing our FSRU fleet provides us with a unique ability to deliver the best solutions that scale with our customers’ needs in both developed and emerging markets,” stated the CEO.

The company added that it was increasing its full-year 2022 guidance range.

Adjusted gross earnings are now expected to range between $264M and $274M, up from $249M and $269M.

US energy and liquefaction technology firm Black & Veatch has selected Mario Azar as the new Chairman and Chief Executive for the company after the decision to retire after 44 years at the helm of Steve Edwards.

The successor to Edwards as CEO and Chairman is currently serving as president of the Energy & Process Industries division at the Overland Park, Kansas-based company.

One of Black and Veatch’s most recent LNG contract awards was for the Cedar FLNG project proposed by Pembina Pipeline Corp and the Haisla First Nation in British Columbia in Western Canada.

Black and Veatch was chosen with South Korean shipbuilder Samsung Heavy Industries for the front-end engineering and design of the project's proposed floating liquefaction, storage and offloading units.

the Cedar project expects to make a final investment decision in 2023 following completion of the environmental assessment process.

The FLNG facilities will be located in the Douglas Channel and have a liquefaction capacity of up to 4 million tonnes per annum of LNG.

On its leadership change, Black and Veatch said that Azar’s appointment was only the eighth senior leader in the founder, managing partner or chair role in the US Midwest company’s 107-year history.

Critical markets

“As global megatrends reshape the critical infrastructure markets we serve, the Black and Veatch Board of Directors is thrilled to select Mario based on his vast global experience, proven leadership capabilities, innovative and collaborative approach and strong focus on client relationships,” said outgoing CEO and Chairman Edwards.

“Since joining the company in 2018, Mario has been the architect of an effort that is repowering the power industry as well as in the strategic repositioning of our company to address the megatrends our clients and the world faces,” stated Edwards.

Black and Veatch said that Azar’s leadership experience spanned more than 32 years in the energy and industrial fields, much of it in engineering and construction solutions.

Prior to joining Black & Veatch in 2018 as the president of the global power business, Azar served in multiple executive roles and led large global businesses at Germany’s Siemens and previously Westinghouse of the USA.

“It is a true honor to be selected to lead Black and Veatch, a company with such deep history and a stellar reputation built by a world-class team of global professionals,” said Azar.

“The portfolio of solutions Black and Veatch offers, coupled with our transformed business model aligning positions us to continue fulfilling our mission,” he declared.

The company said it would name a successor to fill Azar’s current role in the near future.

Before embarking on his engineering career, Azar earned a Bachelor of Science in electrical engineering from the University of North Carolina at Charlotte.

Excelerate Energy, the US LNG specialist and a market leader in floating storage and regasification units (FSRUs), saw its shares increase by 11.8 percent in its trading debut after raising $384 million in the biggest US initial public offering since January 2022.

Shares in Excelerate closed on April 13 at $26.85 per share, giving the company a market value of about $2.8 billion based on the outstanding shares listed.

Excelerate shares are now quoted on the New York Stock Exchange under the ticker symbol “EE”.

Excelerate sold 16 million shares at the top of a marketed range of $21 to $24 per share in its IPO.

The share sale came at a time when FLNG project interest is increasing worldwide as nations try to underpin their energy security with fast-track import projects.

The company has pioneered over a dozen import ventures worldwide and has also led the way in ship-to-ship LNG transfers.

Excelerate, based in The Woodlands in Houston in Texas, is part of a privately held US energy group founded by George Kaiser, owner of the Bank of Oklahoma. Kaiser will continue to control the majority of the shares.

Developer

Excelerate developed the Bahia Blanca GasPort, South America’s first LNG import terminal in 2008, and has also operated GNL Escobar, an LNG import terminal along the Paraná River of Argentina, since 2011.

The business spans the globe, with regional offices in eight countries and operations in the US, Brazil, Argentina, Israel, United Arab Emirates, Pakistan and Bangladesh.

The Excelerate prospectus for the IPO informed potential shareholders that it was the largest provider of regasified LNG in Argentina and Bangladesh and one of the largest providers of regasified LNG in Brazil and Pakistan, while also operating the biggest FSRU in Brazil.

The Excelerate company has additionally started FSRU-led import ventures in the US and the Middle East.

Excelerate had net income of $41 million and revenue of $889M in 2021 compared with $33M of profits and $431M in revenues in the previous year.

The governments of Argentina and Bolivia confirmed a new pipeline natural gas agreement with the Argentinians saying they would save foreign exchange reserves with the Bolivian gas and would have to buy 14 fewer LNG cargoes to meet their needs.

Argentine President Alberto Fernandez and his Bolivian counterpart Luis Arce reached a deal in talks in Buenos Aires for Bolivia to export 14 million cubic metres of natural gas per day to Argentina during the Southern Hemisphere winter season.

A joint statement said that the price of the Bolivian supplies was set at US$12.18 per million British thermal units.

Argentina’s Energy Secretary, Dario Martínez, said the Bolivian provisions would mean about 14 fewer cargoes of LNG would have to be purchased at high price and would save Argentina around US$770 million in LNG import costs.

“This is good news for Argentina, for the Central Bank’s dollar reserves and for the government’s fiscal plan,” said Martínez in a statement.

Analysts note that Argentina has suffered from an ailing economy and has been unable to meet investment needs to monetize its huge shale oil and gas resources.

A Bolivian Government statement later said the provision of gas in 2021 from Bolivia to Argentina was established at 14 million cubic metres er day, in winter, and for the rest of the year at 10 million cubic metres and this would be repeated.

Possible increase

“The President of Bolivia Luis Arce agreed with his Argentine counterpart, Alberto Fernández, the sale of natural gas and promised to give priority to its neighbour in case there is a greater production of natural gas on the Bolivian side,” added the statement.

“We are making an effort to maintain the levels of past gas supply to the Republic of Argentina and with additional gas that may be produced in Bolivia,” declared the Bolivian President.

Bolivia added that specific mechanisms between the Bolivian and Argentine state energy companies, Yacimientos Petrolíferos Fiscales Bolivianos and Argentina’s IEASA (Integración Energética Sociedad Anónima) would benefit both countries.

“The Argentine and Bolivian presidents agreed on the importance of realising concurrent actions so that the contract of Purchase and Sale of Natural Gas between YPFB and IEASA, reflects a new régime,” added Bolivia.

“It guarantees the supply of 14 million cubic metres, giving priority to making available additional volumes in the winter period as well as waiving the rights and obligations through to 2025, whose effect will be entrusted to the responsible Ministries and departments in order to draft the corresponding documents,” it added.

“The Presidents further agreed to advance in the study of investment opportunities for YPFB in the Vaca Muerta Shale basin in Argentina, working jointly to identify the alternatives for supplying liquid fuels in order to secure the energy security of both states,” stated Bolivia.

Excelerate Energy, the US specialist and a market leader in floating storage and regasification units (FSRUs), is proceeding with an initial public offering of shares valued at a total of up to $384 million at a time when FLNG project interest is increasing worldwide.

Demand for liquefied natural gas remained firm worldwide along with seasonally high Asian spot prices over $13.00 per million British thermal units for September and with deliveries to China, Japan and South America still being preferred to European destinations.