Excelerate's Second Tank Farm Is a Proof Point, Not Yet a Payday

Excelerate's Second Tank Farm Is a Proof Point, Not Yet a Payday

Excelerate Energy just delivered the best quarter in its history and a new Caribbean growth project — and the stock is still down 7% over the last 90 days and 17.6% from its February peak. That disconnect is the real story. The company is asking investors to underwrite a 2027-2029 build-out while the near-term cash contribution from its newest project is almost rounding-error small.

A record quarter the tape has already discounted

The Q3 print was objectively strong. Adjusted EBITDA hit roughly $133 million, the highest quarterly result in company history, and net income rose to $60 million. Management narrowed full-year adjusted EBITDA guidance to $495 million-$515 million. “We delivered adjusted EBITDA of approximately $133 million. This is the highest quarterly result in our company's history.” — Steven Kobos, President and CEO · 2026-11-05 Yet the stock has de-rated. The latest filed quarter — period ending July 2026 — showed total revenue of $329 million, up 61% year over year but down 24% sequentially, with an operating margin of 24.6%. The Q3 net income jump to $60 million is real, but it follows a history of lumpy earnings that makes the market skeptical of run-rate extrapolation.

The balance sheet is fine but not pristine. Net debt was $871 million, and trailing net leverage was 1.8 times. Effective net cash stood at negative $578 million in the latest filing. Interest coverage is 3.3x, roughly half the 7.6x level of 2021. Interest coverage of 3.3x is still comfortable, but it explains why management spent time emphasizing the $500 million undrawn revolver and low leverage. The company also lowered maintenance capex guidance to $65 million-$75 million while raising committed growth capex to $400 million-$410 million — a mix shift that flatters near-term free cash flow but signals the growth bill is coming due.

Bahamas is the first real spoke in the Caribbean hub

The new Bahamas LNG Hub is the first concrete integrated infrastructure project in the Caribbean since Excelerate acquired the Jamaica platform. The anchor customer is AxDo Bahamas, a joint venture between Axpo and Domicisle LNG, under an 11-year LNG supply agreement. Deliveries ramp to 16 TBtus per year — less than half the planned terminal capacity — and initial volumes begin in Q1 2027 using the existing Jamaica platform. Phase two adds a floating storage unit near Grand Bahama in the second half of 2028, with estimated capex of $85 million-$95 million.

The near-term numbers are small. AxDo contributes roughly $6 million of EBITDA in 2027, rising to an average annual run rate of about $15 million over the remaining 10 years once the FSU is deployed. Oliver Simpson was explicit on the phase-in: “we talked about $6 million of EBITDA in 2027 for that... at full rate around $15 million on the base AxDo contract.” — Oliver Simpson, Chief Commercial Officer · 2026-11-05 Steven Kobos was more expansive about the strategic upside: “I could easily see us doubling this, but that's not the end of our ambition in the Caribbean by any means.” — Steven Kobos, President and CEO · 2026-11-05 The project gives Excelerate a second tank farm in the region and a physical platform for pull-through demand — the phrase management has used since the Jamaica deal to describe downstream gas sales, bunkering, and power customers.

But compare the announcement to the promise. Since the Jamaica acquisition, management has guided to $80 million-$110 million of Caribbean EBITDA by 2030. “we put out there the guidance through 2030 on our expectations for the Jamaica and Caribbean platform.” — Oliver L. Simpson, Chief Commercial Officer · 2025-08-11 Bahamas at $6 million in 2027 and a $15 million run-rate is a small slice of that target. It is a proof point, not yet the earnings inflection. The market may also be waiting for evidence that the contract volumes can scale beyond the anchor customer before it pays up for the Caribbean story.

The building blocks are big — and back-end loaded

The bull case rests on a stack of projects that management calls the building blocks: Iraq at roughly $100 million of EBITDA run-rate, Colombia with a 35% uplift, the FSRU conversion in 2028, reliquefaction deals on the Sequoia and Experience, the Bahamas hub, and other Jamaica-Caribbean growth. Dana Armstrong put the full stack in one sentence:

by 2029, those building blocks add up to anywhere between $250 million-$300 million of growth in EBITDA.

That is a 50%-60% increase over the midpoint of 2026 guidance, and it explains why management is willing to tolerate a drawdown in the stock. But every dollar lands in 2027 or later. Iraq requires jetty reinforcement and mechanical completion in April 2027; Colombia targets Q1 2027; the conversion project delivers in 2028. Management avoided the Strait of Hormuz by using existing FSRUs in the Arabian Gulf and non-Gulf assets for Colombia, which is operationally clever but also a reminder of how geopolitical the timeline is. They declined to identify which vessels will serve Iraq and Colombia until commercial arrangements are finalized.

The conversion economics are the cleanest part of the growth story: the Methane Patricia Camila conversion is now estimated at roughly $260 million including the vessel, with Seatrium handling EPC and a 2028 delivery target. Management continues to cite a five-to-seven times build multiple. In prior calls they teased new builds and multiple conversions; this quarter the language shifted decisively toward conversions and integrated downstream projects. The building blocks are now specific enough to underwrite, but they are also capital-intensive and bespoke.

What the market is missing — or what management is asking it to believe

The infrastructure pitch is simple: Excelerate is a toll road for LNG, not a commodity trader. Kobos made the point bluntly: “we don't care what the price of LNG is. We're buying and selling and doing so with fixed margins whenever we can.” — Steven Kobos, President and CEO · 2026-11-05 If that holds, the company deserves a midstream-style multiple. The problem is that the toll-road math depends on sovereign counterparties in Iraq, Colombia, and the Bahamas, each with its own political and execution risk. The prior calls show management has been moving toward integration for over a year: “we are starting to move to that integration -- we think that's going to be required to succeed moving forward. We think that's the future of regas.” — Steven Kobos, President and CEO · 2026-08-06 And they have long argued integration lifts returns: “the more we can integrate, the higher the returns will be... more integrated projects closer to the mid-teens or sometimes higher.” — Dana Armstrong, Chief Financial Officer · 2026-08-06

That is the tension. The strategy is coherent, the balance sheet can fund it, and the Q3 print was strong. But the stock is telling you the market wants cash flow, not another announcement. Until the Bahamas project and the 2027 startups begin contributing, Excelerate remains a show-me story — one with a credible plan and a record quarter, but still waiting for the back end of the decade to arrive.