FSRU Operator Excelerate Soars With $384M IPO

Excelerate courtesy file image

Posted on 13 April 2022 14:38 by

The Maritime Executive

US Floating LNG Storage and Regasification Unit (FSRU) operator Excelerate Energy achieved a successful IPO on the NYSE, seeing its share jump 12% on the first morning after its IPO.

Excelerate raised a total of $384 million, selling 16 million shares at an initial value of $24 each. This was the upper end of its expected range. Listing underwriters have 30 days to purchase an additional 2.4 million shares at the IPO price of $24 each (an additional $58 million) if they exercise all options. That would be a discount to market price: At noon Wednesday, Excelerate stock was trading at $26.90.

The company is in a desirable position. It is one of a limited number of operators of FSRUs, the floating LNG receiving terminals that can set up and start accepting liquefied gas deliveries in a relatively short time. FSRU’s limited global fleet is attracting new interest due to the Russian invasion of Ukraine, which has prompted northern European countries to rethink their heavy reliance on Russian natural gas.

Germany, which is particularly dependent on Russian pipelines, does not have onshore reception terminals for LNG. To diversify the supply, its major utilities have begun signing charters for FSRU capacity. The Dutch utility Gasunie has also purchased and chartered an FSRU for the port of Eemshaven in the Netherlands.

These on-board regas units can be connected to a gas distribution network on a time scale measured in months; in comparison, site clearance, development and construction of an onshore LNG terminal typically takes years. Each typical FSRU has around four billion cubic meters of regasification capacity, which is enough to replace 2.5% of European imports of Russian gas (if adequate shipments of LNG can be provided to occupy the terminal).

Excelerate offers a bundled energy service, including FSRU, construction and operation of the berth jetty and LNG supply. The company describes its service as a way to end “energy poverty”, reflecting its longstanding focus on deployments in developing countries. For markets with limited access to capital, a portable, offshore-built and offshore-operated regassing plant may be an attractive option, the company suggests.