Excelerate warns Middle East conflict costing US$1m monthly as Jamaica gas sales grow
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Excelerate Energy Inc, which operates gas operations in Jamaica, Asia, and the Middle East, said the closure of the Strait of Hormuz is costing the company US$1 million per month.
Concurrently, the Houston, USA-based company said that its Jamaican customers continue to grow as it prepares to use Jamaica as a hub for the region.
“We expect the financial impact to be approximately $1.0 million per month while the Strait of Hormuz remains closed,” stated Steven Kobos, president and CEO, Excelerate Energy, in the earnings call last Thursday.
Excelerate said it received a force majeure notice from QatarEnergy in March related to an liquefied natural gas (LNG) supply agreement, and subsequently issued a corresponding notice to its customer in Bangladesh. Kobos told analysts on the earnings call that the financial hit was manageable, given the contractual structure of the company's assets.
“These agreements are structured on a back-to-back basis, with delivery obligations aligned to supply commitments and supported by contractual force majeure protections,” Kobos added about force majeure, which excuses a party from fulfilling its contractual obligations when an extraordinary event beyond their control makes performance impossible or impractical.
Kobos said that Excelerate has employees and seafarers operating in and around the Arabian Gulf. The company owns and operates assets that deliver reliable downstream LNG and power solutions to countries around the world.
Excelerate delivered US$122 million of adjusted earnings before interest, depreciation, and amortisation—EBITDA and achieved a 99.8 per cent reliability rate across its asset portfolio for the March quarter.
In Jamaica, executives pointed to growing gas sales through truck deliveries to new and existing customers, with the island serving as a distribution hub for a wider Caribbean expansion strategy.
"We've got the team on the ground knocking on the doors, chasing those opportunities," said Chief Commercial Officer Oliver Simpson, describing incremental volume growth through the company's small-scale trucking operation. "We're agnostic to the technology — it's all about how we get that demand, how we build up that demand."
Kobos said Jamaica would anchor a “spoke-and-hub model” stretching across the region. "We are pleased to be a partner with the Jamaican Government and look forward to advancing new opportunities in Jamaica and throughout the Caribbean," he said, adding that some expansion deals were already in the pipeline but too small to warrant separate announcements.
Last year, Excelerate completed a US$1.05-billion acquisition of New Fortress Energy's integrated LNG and power platform — comprising the Montego Bay LNG terminal, the Old Harbour floating storage and regasification terminal, and the Clarendon 150-megawatt combined heat and power plant.
Revenue for the quarter hit US$433.4 million, beating analyst forecasts of US$343.7 million by 26 per cent. Net income climbed 28 per cent sequentially to US$50 million. Despite the strong results, Excelerate's stock fell 6.81 per cent in premarket trading, reflecting investor concern over the company's revised full-year adjusted EBITDA guidance, now set at US$480 million to US$510 million, down from prior projections, after the company said its Iraq LNG terminal project would be delayed until 2027.