The Woodlands, TX: The sudden growing orderbook of FSRUs is not a concern, and speculative orders are not the way to go, argues Rob Bryngelson, the president and ceo of Excelerate Energy in Maritime CEO’s regular Friday shipowner profile.
Excelerate Energy is an American developer of LNG transportation and floating regasification infrastructure, a provider of LNG storage and floating regasification services, a trader and importer of LNG and it recently entered into floating LNG production.
Excelerate Energy has the world's largest FSRU fleet, with eight vessels currently in operation and one under construction.
“Length in the FSRU fleet is not a concern,” Bryngelson says, “as we don't see speculative newbuilds being an advantage.”
Most projects have unique performance and environmental characteristics that may not be satisfied by a speculative ship, he explains, requiring modifications or redesign – translating into higher cost to the customer. Moreover, he points out that there is generally sufficient time to construct a new vessel in parallel with onshore infrastructure.
“For time-critical situations, we can provide one of our fleet as a bridging vessel or a permanent solution,” Bryngelson adds.
Still the focus on the orderbook is wrong anyway, Bryngelson contends.
“More important than the number of vessels available is the ability of the regasification service provider to deliver on its commitments. Unlike our competition, Excelerate doesn't simply focus on the vessel,” he says.
Excelerate can offer a complete solution where it designs, builds, owns and operates the FSRU and fixed infrastructure, such as jetty and pipeline, to connect to the onshore load. Similarly, Excelerate can simply offer an FSRU and consult on the design of the fixed infrastructure should the customer choose to build it themselves.
“We can couple this with our ability to source LNG from our established trading relationships. Our customers aren't just looking for an FSRU – they want natural gas, and we are flexible in the deal structures we can accommodate,” the gas boss maintains.
Excelerate’s latest vessel, being built for Petrobras, is the largest FSRU in the world – with regasification capacity of over 800 mmcfd. Excelerate's existing vessels, along with option slots it holds with Korea’s Daewoo Shipbuilding & Marine Engineering, allow it to offer tailored solutions for loads ranging from 50 mmcfd to over 1 bcfd.
On the market outlook for rates for FSRUs, Bryngelson admits further down the line there is likely to be some cooling off.
“FSRU rates have been fairly stable for several years now, and do not fluctuate with the same volatility as conventional charter rates,” he says, adding: “There may be some rate compression as the markets mature.”
Aiming to be the total LNG solutions provider Excelerate is rolling out a raft of new initiatives.
One area is in the development of small-scale delivery – or hub-and-spoke – solutions. These comprise a series of small scale tankers and either floating or land-based regasification, allowing Excelerate to serve smaller regional markets from a central hub.
“This is ideal for serving multiple load centres not connected by a pipeline network or are located on multiple islands in a region,” Bryngelson explains.
Another new development is Excelerate’s FSRU + design – a large-scale FSRU with 265,000 cu m of storage and as much as 1.2 bcfd of regasification capacity.
“This,” says Bryngelson, “is ideally suited for large markets or markets with significant growth potential, and can be delivered at significantly lower cost and with a shorter time to market than traditional onshore facilities.”
Bryngelson is one of the founders of Excelerate. Previously he worked at El Paso Corporation’s Global LNG group.
