Excelerate Energy adds $250 million term loan to acquire FSRU Sequoia

US-based LNG player Excelerate Energy has entered into an amended and restated senior secured credit agreement, including a $250 million term loan for the purchase of a floating storage and regasification unit (FSRU).

Excelerate Sequoia. Courtesy of Excelerate Energy

In addition to the new $250 million term loan maturing on 17 March 2027, the credit agreement includes extending the maturity date of the existing $350 million revolving credit facility to 17 March 2027, among other things.

The company revealed that the proceeds from the term loan facility are intended to be used for the acquisition of the FSRU Sequoia, which is currently under a bareboat charter with Maran Gas until mid-2025, and transaction fees and expenses related thereto.

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Excelerate intends to acquire the vessel by exercising a purchase option that it has with the vessel’s owner and for the purchase to be completed in April 2023. The commitments under the term loan facility expire on 1 May 1 2023 if the acquisition of the FSRU Sequoia does not occur by such date.

The 2020-built Excelerate Sequoia has a storage capacity of 173,400 cubic metres and is capable of operating both as an FSRU and a fully tradable LNG carrier.

Proceeds from the revolving credit facility are expected to be used primarily for letters of credit, working capital, and other general corporate purposes, the company explained.

“Refinancing our existing credit facility is a significant next step in our plans to improve our capital structure, and we would like to thank our lenders for their continued support and confidence in Excelerate”, said Dana Armstrong, Chief Financial Officer of Excelerate Energy.

“This amended credit facility enhances our financial flexibility and supports our future growth and development initiatives. We are excited to acquire the FSRU Sequoia, one of the most capable vessels in the industry, at an attractive price well below current market values.”

Based on the information on its website, the US company currently operates a fleet of ten FSRUs and has one unit on order at South Korean shipyard Hyundai Heavy Industries (HHI).

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The new FSRU will have a storage capacity of 170,000 cubic metres and a maximum regasification capacity of one billion standard cubic feet per day (1,000 MMscf/d). It is scheduled for delivery in 2026.

Two of its FSRUs were chartered to serve LNG import terminals in Germany and Finland.