The Tribune

By NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

A US energy infrastructure provider is “ecstatic about The Bahamas” and the planned “flagship” liquefied natural gas (LNG) hub and supply deal expected to generate a $15m boost to its annual adjusted operating income.

Steven Kobos, Excelerate Energy’s president and chief executive, hailed his company’s 11-year agreement to supply the AxDo Bahamas joint venture while revealing that the volumes involved are “less than half the capacity” of the offshore LNG terminal and distribution hub it plans to locate near Grand Bahama by the 2028 second-half.

Disclosing that “total capital investment” in the proposed Grand Bahama hub will likely range between $85m-$95m, he and other Excelerate executives told Wall Street analysts during the company’s 2026 third quarter results conference call that The Bahamas is part of wider Caribbean ambitions that are projected to see the region deliver between $80m to $11m growth in operating income by 2029.

While Excelerate has signalled it has yet to obtain all the necessary Bahamas government and regulatory approvals, stating that the Grand Bahama offshore hub’s launch is subject to “permitting and construction timelines”, Mr Kobos indicated that the terminal will be centred on an existing LNG-carrying vessel that will be converted into a floating storage unit.

Disclosing that Excelerate had “sat on this until it was fully baked”, he reiterated that the 11-year supply agreement with AxDo Bahamas, a joint venture between Axpo, a Swiss energy producer and trader, and Bahamas-based Domicisle, an LNG supply, distribution and logistics provider, is providing the “anchor customer” and commercial feasibility for the Grand Bahama offshore terminal.

Tribune Business reported last week how the LNG purchased from Excelerate by AxDo Bahamas (Axpo and Domicisle) will be the fuel for Island Power Producers (IPP) 70 mega watt (MW) Arawak Cay power plant that will supply cruise ships docked in Nassau Cruise Port with cleaner energy. And it is also the LNG fuel source for Family Island independent power producers, thus playing a key role in the Government’s wider energy reform strategy.

This means that the permits and approvals Excelerate will require for its Bahamas LNG hub are unlikely to be held-up or non-forthcoming, given that doing so would undermine and delay the Davis administration’s own energy reform objectives of lowering electricity costs, improving supply reliability and generating power from cleaner sources.

Mr Kobos, describing The Bahamas LNG distribution hub and associated AxDo supply deal as “an important milestone in Excelerate’s growth strategy”, told financial analysts: “The is our first integrated infrastructure opportunity in the Caribbean since acquiring the Jamaica platform. I’m particularly pleased with this announcement because it demonstrates what we set out to accomplish when we expanded our presence into the Caribbean.

“We saw an opportunity to build on our existing infrastructure and operating capabilities to serve a broader regional market. Today, we are taking an important step in realising this opportunity. At the centre of this development is an 11-year LNG supply agreement with AxDo Bahamas. This is a joint venture between Axpo, an international leader in energy trading and marketing, and Bahamas-based energy, maritime and logistics firm, Domicisle.

“Under this agreement, AxDo will become an anchor customer of our planned offshore LNG storage and distribution terminal near the island of Grand Bahama. LNG supplied through the hub will support marine bunkering, power generators and other downstream customers. The supply agreement [with AxDo] provides for deliveries ramping up to 16bn BTUs (British thermal units) a year, establishing long-term investment grade off-take and a strong commercial foundation for the project.”

Mr Kobos confirmed that, via the planned Grand Bahama LNG hub, Excelerate plans to supply this fuel source to other customers beyond the AxDo Bahamas joint venture. He signalled that a key target will be the cruise ships moving through Bahamian waters on a daily basis, many of which are configured - or are being fitted - to run on cleaner-burning LNG.

No details were given on the number of Bahamian jobs that Excelerate’s proposed offshore Grand Bahama hub will generate, or the project’s potential economic impact for The Bahamas. However, Mr Kobos reiterated: “Beyond this contracted volume [of 16bn BTUs per year], we have additional capacity to grow our sales to AxDo and other customers throughout the region.

“We plan to develop The Bahamas LNG hub in two phases. Initial LNG deliveries are expected to begin in the first quarter of 2027 utilising the existing FSRU (Floating storage and regasification unit) LNG supply and logistics capacity of our Jamaican platform. This will allow us to begin servicing AxDO and generate earnings ahead of deploying dedicated infrastructure in The Bahamas.

“The second phase includes the planned deployment of an FSU or floating storage unit near the island of Grand Bahama in the second half of 2028. The FSU will serve as the offshore LNG storage and distribution hub.” Excelerate is projecting that the LNG supply deal with AxDo will generate $6m in extra adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) or operating income during the deal’s first year in 2027.

This is then forecast to ramp-up to an extra $15m in annual adjusted EBITDA, or operating income, in 2029 with the first full year of supply from the offshore LNG terminal and hub near Grand Bahama.

“We currently estimate the total capital investment in the FSU will range between $85m to $95m,” Mr Kobos said, explaining that the offshore Grand Bahama hub will be centred on a converted LNG-carrying vessel. “This includes the cost for the LNG carrier and the cost of converting the vessel into the FSU. Final conversion costs remain subject to completion of engineering and finalising the project scope.

“From an earnings perspective, we expect the AxDo deal to contribute approximately $6m of EBITDA in 2027. After the FSU is deployed, this will increase to an average annual EBITDA run rate of approximately $15m over the remaining ten years based on current contracted volumes with AxDo.

“Beyond that, we see the potential for meaningful economic upside from additional sales to AxDo and other customers utilising the terminals and capacity from Excelerate. This development represents more than a new commercial agreement. It is a critical component of our multi-phase Caribbean growth strategy,” he added.

“The Bahamas LNG hub and our integrated Jamaica platform will give us two LNG storage and distribution hubs for the Caribbean. Together with our planned FSU hub in Colombia, they will strengthen our position to serve growing LNG demand across the region.” In particular, Excelerate is targeting LNG supply and infrastructure opportunities offered by the 1,500-1,600 ships that are anticipated to be burning this fuel source by 2030.

Responding to questions from Teresa Chen, a Barclays analyst, who asked how the opportunities created by the planned Grand Bahama LNG hub will “scale” and impact both Exclerate’s earnings and capital investment, Mr Kobos said: “Pretty excited… I’m not pretty excited; I’m ecstatic about The Bahamas. I mean, this is a flagship opportunity within the Caribbean.

“I would say the LNG bunkering opportunity in The Bahamas is significant. The Bahamas represents the largest source of potential cruise sector LNG consumption among all the Caribbean locations we have assessed. We’re excited about this and, as I said in the prepared remarks, 16bn BTUs under this contract, that’s less than half the capacity of the asset that we’ll be deploying.

“When you think about that, once we get up to full steam, so to speak, that will be equal to or more than the pull-through demand in Jamaica with our infrastructure there,” he added. “I like to think we are adding the second tank farm in the Caribbean, and we are going to have great efficiency and synergies from the logistics of delivering LNG to tank farms and on to last mile customers.

“We are pleased to work with AxDo, but there are a lot of people that we can help with those tank farms. I expect to see the portfolio players recognise that we are a good source for their own bunkering and last mile opportunities, but just remember… I think that by the end of 2030, you are going to see well over 1,500 LNG capable ships on the water. We don’t expect to capture all of that; we just want to keep building up the opportunity in the Caribbean.

“It’s a great location near US export capacity, and we think we will have advantaged supply chains within the Caribbean to help anyone who wants to optimise their own last mile and bunkering operations. So I can easily see us doubling this but that’s not the end of our ambitions in the Caribbean by any means.”

Mr Kobos reiterated that the proposed offshore Grand Bahama LNG hub is “not the last play in the Caribbean” for Excelerate. The Bahamas is part of greater ambitions to grow adjusted operating income from the Caribbean region by $80m-$110m by 2029 which, in turn, is part of a targeted $250m-$300m expansion in group-wide operating income of EBITDA.

“We sat on this until it was fully baked,” the Excelerate chief said of its Bahamas’ move. “I can assure you we are wearing out that Miami hub airport of American Airlines; the hub and spoke to the Caribbean. We are all over that geography. We are actually moving more personnel to Miami to cover that ground more and more.”

Oliver Simpson, Excelerate’s vice-president and chief commercial officer, said the planned Bahamas terminal will be the company’s first FSU or pure floating storage unit as opposed to its Jamaican assets in Kingston Harbour, which also feature regasification capabilities. He added that the forecast annual $15m increase in operating income will come through by 2029 - the first full-year of the Grand Bahama hub’s operations.

“Obviously, having the asset in The Bahamas is what will open up the opportunities and further scale for us,” Mr Simpson said. “The last thing I will add is that between Jamaica and The Bahamas, our assets in the Caribbean, we have really got a great platform to build from. We have assets that we can further optimise.”

Excelerate’s Bahamas move comes some 18 months after it acquired the existing Jamaican assets from which it will supply the AxDo contract with LNG during 2027 and early 2028 while the Grand Bahama platform is completed.

Greg Buffington, chief executive of Domicisle LNG, told Tribune Business last week that its partnership with Axpo and Excelerate will help slash fuel costs by 40-50 percent for the Family Island power producers playing a key role in the Government’s electricity sector reforms as early as the 2027 first half.

He added that between Domicisle, Island Power Producers and their LNG supply ship affiliate, Onyx Global, their joint venture will feature an investment “north of $200m” and the potential to create up to 100 jobs.