FSRU Operator Excelerate Soars Through $384M IPO

File image courtesy Excelerate

Published Apr 13, 2022 2:38 PM by The Maritime Executive

The U.S.-based LNG floating storage and regasification unit (FSRU) operator Excelerate Energy has completed a successful IPO on the NYSE, seeing its share jump by 12 percent in the first morning after its listing. 

Excelerate took in a total of $384 million, selling 16 million shares at an initial value of $24 each. This was the top end of its expected range. The listing's underwriters have 30 days to buy another 2.4 million shares at the IPO price of $24 each (another $58 million) if they exercise all options. This would be a discount relative to market price: by midday Wednesday, Excelerate's 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 shop and begin accepting deliveries of liquefied gas on a relatively short timetable. The world's limited FSRU fleet is attracting new interest because of 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, lacks any shoreside receiving terminals for LNG. To diversify the supply, its leading utilities have begun signing charters for FSRU capacity. Dutch utility Gasunie has also sourced and chartered an FSRU for the port of Eemshaven in the Netherlands.

These ship-based regas units can be connected to a gas distribution network on a timescale measured in months; by comparison, site permitting, development and construction for a shoreside LNG terminal usually takes years. Each typical FSRU has about four bcm of regasification capacity, which is enough to replace 2.5 percent of Europe's Russian gas imports (if adequate shipments of LNG can be sourced to keep the terminal busy).

Excelerate offers a bundled energy service, including the FSRU, the construction and operation of the mooring pier, and sourcing of the LNG supply. The firm describes its service as a means to end "energy poverty," reflecting its longtime focus on deployments in the developing world. For markets with limited access to capital, a portable, foreign-built, foreign-operated regas plant may be an attractive option, the company suggests.