Excelerate Targets Bahamas Cruise LNG Demand, Weighs Bunkering Investment

Excelerate Energy sees significant potential to supply liquefied natural gas to cruise ships in the Caribbean through its planned offshore LNG hub near Grand Bahama. An 11-year agreement to supply AxDo Bahamas, a joint venture between Swiss energy group Axpo and Bahamas-based Domicisle LNG, provides the commercial foundation for the project. Chief Executive Steven Kobos said the company may invest in bunkering assets in future, though for now it will focus on LNG supply, storage and distribution.

 

The AxDo Supply Agreement

 

Under the agreement, announced on 5 November 2026, Excelerate will supply up to 16 trillion British thermal units of LNG a year to AxDo, making the joint venture the hub’s anchor customer. AxDo was set up in October 2026 to carry out small-scale LNG and bunkering operations in the region. The contract volume represents less than half of the hub’s planned capacity, leaving room for further sales to AxDo or other customers. Kobos said he could see volumes doubling, although no additional contracts have yet been signed.

Axpo’s head of small-scale LNG, Daniele Corti, said reliable energy access is essential for the development of the Bahamas and the wider Caribbean, and that the deal lets Axpo apply its small-scale LNG experience to the region. Domicisle LNG Chief Executive Greg Buffington described the agreement as an important step towards building a reliable LNG supply network across the Bahamian islands. The partnership combines Axpo’s trading and marketing strength with Domicisle’s local maritime logistics knowledge. Excelerate provides the upstream supply and floating infrastructure.

 

Two-Phase Development

 

Initial LNG deliveries are expected to start in the first quarter of 2027, using the existing floating storage and regasification unit, supply chain and logistics of Excelerate’s Jamaica platform. This approach allows the company to begin serving customers before building dedicated infrastructure in the Bahamas. A second phase, planned for the second half of 2028, would deploy a floating storage unit near Grand Bahama to act as the offshore storage and distribution terminal. That phase depends on final permits, construction timelines and other contractual conditions.

According to reports from Excelerate’s third-quarter earnings call, the floating storage unit would require an investment of about US$85 million to US$95 million, covering the purchase and conversion of an LNG carrier. Excelerate expects the Bahamas project to generate around US$6 million of EBITDA in 2027. Earnings are forecast to rise to an average annual run rate of about US$15 million over the remaining 10 years of the AxDo agreement, based on contracted volumes. Any additional sales would add to those figures.

 

The Cruise Opportunity

 

Speaking on the earnings call, Kobos described the Bahamas as a flagship opportunity in Excelerate’s Caribbean growth strategy and called the LNG bunkering opportunity significant. He said the Bahamas represents the largest source of potential LNG consumption among the Caribbean locations Excelerate has assessed for the cruise sector. The islands sit at the centre of the world’s busiest cruise region, with frequent calls from ships based in Florida. Many of the newest and largest cruise ships are designed to run on LNG.

The agreement does not specify how volumes will be split between cruise ship bunkering, power generation and other users. Excelerate nonetheless sees cruise shipping as a major potential source of extra demand as the hub develops. The Bahamas also has experience with LNG operations at sea. In 2019, Excelerate and Equinor completed a ship-to-ship LNG transfer at the South Riding Point facility on Grand Bahama.

 

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Bunkering Strategy

 

Kobos said Excelerate might invest in bunkering assets later, but for now prefers to concentrate on supplying, storing and distributing LNG rather than handling the final transfer of fuel to ships. Bunkering vessels require significant capital and specialist operations. Leaving that role to partners such as AxDo allows Excelerate to focus on its core strengths in floating LNG infrastructure. It also reduces the company’s exposure while demand in the region builds.

Kobos pointed to the expected growth of LNG-fuelled shipping, with more than 1,500 LNG-capable vessels forecast to be in operation by the end of 2030. That growth is concentrated in cruise ships, container ships and car carriers, many of which trade through the Caribbean. As more of these vessels enter service, demand for reliable regional LNG supply will rise. A Bahamas hub would shorten supply chains for ships that currently bunker at US Gulf or East Coast ports.

 

Excelerate’s Caribbean Growth Plan

 

The Bahamas hub forms part of a broader Caribbean strategy that Excelerate describes as a hub-and-spoke model. Its established Jamaica platform and the planned Bahamas hub would create two regional LNG hubs, supported by a planned floating regasification unit in Colombia. Together, these assets are designed to serve power generation, industrial and marine customers across the region. Excelerate has kept its target for Caribbean EBITDA growth in place.

The approach reflects the economics of small-scale LNG in island markets, where demand is spread across many smaller users. A central storage and distribution point can supply power plants, industrial sites and ships more efficiently than separate import terminals. For the Bahamas, the hub could also support cleaner power generation and energy security. Its commercial success will depend on securing more contracts, especially from cruise lines and their fuel suppliers.

 

Source: Excelerate Energy