Excelerate Energy has landed two of the four fresh FSRU contracts awarded so far this year. Karen Thomas asked founder and chief executive Rob Bryngelson where the company sees its next opportunity
When LNG World Shipping met Excelerate founder and chief executive Rob Bryngelson earlier this year, he had a spring in his step and a twinkle in his eye.
Looking back, it’s hard to know whether his impending deal to place the 138,000m³ Excelerate in Abu Dhabi or more general excitement about floating import prospects put the Excelerate boss in buoyant mood. Clearly, though, the Houston-based company, owner of the world’s largest floating storage and regasification unit (FSRU) fleet, is in prime position to tap growing demand for these vessels.
FSRUs offer a quicker, cheaper option than land-based LNG-import terminals. The FSRU fleet stood at 23 vessels worldwide, with a combined capacity of nearly 3.5 million m³ at year-end 2015, according to the International Group of Liquefied Natural Gas Importers (GIIGNL).
Analysts expect three or four FSRU contracts to be awarded annually to 2021. At any given time, Mr Bryngelson says, around 40 FSRU projects are being proposed around the world. Of these, Excelerate is following half and working to land six to eight.
“You never know when one project that has lain dormant will start to move – because there’s a new energy minister, or new demand – and suddenly it becomes a national priority,” he says.
At the time of writing, just four new FSRU contract awards had been confirmed this year – to Excelerate in Abu Dhabi and in Bangladesh, to BW in Pakistan and to Golar LNG in Ivory Coast.
Two new floating storage units (FSUs) supplement these new FSRUs. The first entered service off Bali in Indonesia in May. The second involves Golar LNG, which is modifying its 138,000m³ LNG carrier Golar Arctic as an FSU, to be moored off Montego Bay to store LNG in Jamaica.
Excelerate sees the Middle East, the Indian subcontinent, sub-Saharan Africa and South America as the most promising FSRU markets. In June, it agreed to charter a 138,000m³ FSRU to import up to 3.5 million tonnes a year (mta) through Moheshkhali in Bangladesh.
The company takes a two-pronged approach. One is to convert LNG carriers into FSRUs. The other is to order newbuildings. Within the next year, Mr Bryngelson hopes to order one newbuilding and to complete “another couple” of projects under long-term discussion, including Bangladesh.
Cost, timing and fit are everything in offshore imports, he says. “Everyone wants their FSRU quickly – and everyone wants it cheap. It really comes down to a combination of timing, price and availability. There’s no one right answer.
“If the customer has three years before they need to have an FSRU in service, they may go for a newbuild. If they need it in 18 months, a conversion is the solution. Or we can offer an existing vessel as a bridge. With Petrobras in Brazil, we offered a bridging vessel, then delivered a purpose-built vessel in 2014.”
This summer, Norway-based FSRU owner Höegh LNG reversed its newbuilding-only policy to convert an LNG carrier to get the vessel to market faster. The newbuild-versus-conversions debate baffles Mr Bryngelson, who prefers to decide project by project.
“I don’t know what the controversy is,” he says. “We can build a conversion that is as fuel-efficient as a newbuild ship. We can do it cheaper and in a shorter period of time. But if you need a highly specialised vessel with very large capacity – like our Dubai-based Explorer, which can put out 1 billion ft³/day – you will probably need a newbuild.
“We are not aggressively ordering speculative newbuildings – because what would you build? There are projects that probably need only 200-300 million ft³/day of natural gas and others that may need 500-600 million ft³/day, or over 1 billion ft³/day.
“If you were to build speculatively, it could be for any one of those projects. You’d end up forcing what you had onto a project, not delivering what it needs. That’s not to say we may not keep a little speculative length – we may well do so at some point. But that’s really not our sole strategy.”
An old hand in a new business, this year Excelerate completed its thousandth ship-to-ship LNG transfer. It hit the headlines this spring, when the upgraded 150,900m3 Explorer, based in Dubai, became the first FSRU to achieve 1 bcf/day send-out capacity. Explorer is also the first FSRU fitted with an LNG-bunker port to supply gas as marine fuel.
And yes, Excelerate is pondering small-scale LNG projects too. “This is the kind of bunker-supply operation that interests us, not building bunker-supply ships,” Mr Bryngelson says. “If we can bunker from one of our FSRUs, we will definitely do that. It’s a value-added service that our customers can offer to their markets.”
Small-scale LNG is exciting, but complex. Excelerate has had the talks and drawn up plans. Mr Bryngelson is not yet ready to say more.
“We’ve looked at everything from regas barges with a storage of 5,000m³ up to 35,000m³-40,000m³,” he says. “We’ve also looked at small FSRUs – every permutation you can imagine, to see what makes sense.
“Then again, you don’t want a fleet of 15 very different vessels. You need some commonality for the sake of reliability, maintainability and cost. When we started to look at small-scale, we thought it would be easy. It isn’t. You have to be sensitive to the costs.”
Close collaboration will be critical, he says. “It’s complex and that’s where you really need to work closely with the customer.
“If you have a string of islands that have LNG demand in multiple locations, the question becomes how much storage you need and whether you can use other fuels as back-up in the event of disruption – that all feeds into the solution you offer.
“Is it regasification vessels or regas barges? Do you need a conventional LNG carrier or a small-scale carrier? The technology is the same but the solutions get more complicated. Getting a cost-effective solution demands a lot more collaboration. That’s the challenge.
“A conventional FSRU delivering 500 million ft³/day at one location is pretty easy. Five or six locations force you to think about how you’ll handle the delivery logistics for that. It’s something we’re interested in, yes. But it’s a much more complicated part of the market than people may realise.”
Excelerate Energy fleet list:
FSRUs
TBD, 150,900mᶾ
Aguirre Offshore Gasport, Puerto Rico
Owner: Excelerate Energy
Charterer: Puerto Rico Electric Power Authority (PREPA)
Contract: Guaranteed contracted send-out of up to 250 mmcf/day for 15 years beginning 2018
Experience, 173,400mᶾ
Guanabara Bay, Rio de Janeiro, Brazil
Owner: Excelerate Energy
Charterer: Petrobras
Contract: Guaranteed contracted send-out of up to 700 mmcf/day for 15 years
Excelsior, 138,000mᶾ
Various – supports Petrobras’ LNG activities
Owner: Excelerate Energy
Charterer: Petrobras to 2017
Express, 150,900mᶾ
Supporting Excelerate’s chartering activities
Owner: Excelerate Energy
Expedient, 150,900mᶾ
GNL Escobar, Argentina
Owner: Excelerate Energy
Charterer: JV Repsol-YPF
Contract: Guaranteed contracted send-out of up to 500 mmcf/day
Excellence, 138,000mᶾ
Hadera Gateway, Israel
Owner: Excelerate Energy
Charterer: Israel Electric Corp
Contract: Guaranteed contracted send-out of up to 500 mmcf/day
Explorer, 150,900mᶾ
Jebel Ali LNG Terminal, Dubai, UAE
Owner: Excelerate Energy
Charterer: Dubai Supply Authority (DUSUP)
Contract: Guaranteed contracted send-out of up to 1 bcf/day delivery for 10 years
Exquisite, 150,900mᶾ
Port Qasim, Karachi, Pakistan
Owner: Excelerate Energy
Charterer: Engro
Contract: Guaranteed contracted send-out of 690 mmcf/day for 15 years
Exemplar, 150,900mᶾ
Bahía Blanca GasPort, Argentina
Owner: Excelerate Energy
Charterer: YPF
Contract: Guaranteed contracted send-out of up to 500 mmcf/day
Excelerate, 138,000mᶾ
Ruwais LNG Terminal
Owner: Excelerate Energy
Charterer: Abu Dhabi Gas Industries Ltd (GASCO)
Contract: Guaranteed contracted send-out of up to 500 mmcf/day
LNG carrier
Excalibur, 138,000mᶾ
Various – supports Petrobras’ LNG activities
Owner: Excelerate Energy
Charterer: Petrobras to 2017
© 2023 Riviera Maritime Media Ltd.