"Two Conflicts In The Past Four Years… People Care About Energy Security" – Steven Kobos, Excelerate Energy

Today we had the pleasure of hosting Steven Kobos, President and CEO of Excelerate Energy. Steven has served as President and CEO since 2018 and previously spent 11 years as a member of the company’s Board of Directors and corporate counsel. Throughout his career, he has worked across global energy markets, including Kuwait, Bangladesh, Pakistan, Argentina, Brazil, Finland, Germany, and the Middle East. Excelerate is a global leader in flexible LNG infrastructure solutions, focused on expanding access to reliable, affordable, and secure natural gas. The company operates one of the world's largest fleets of Floating Storage and Regasification Units (FSRUs) and provides integrated LNG solutions spanning the entire value chain. We were thrilled to hear Steven’s perspective on the evolving and increasingly complex global energy landscape. In our conversation, we explore the evolution of the global LNG market, the impact of U.S. shale on Excelerate’s business model, and why the company has increasingly focused on integrated LNG and infrastructure solutions rather than simply providing floating regasification assets. We discuss the growing importance of energy security following recent geopolitical disruptions, including tensions surrounding the Strait of Hormuz and Steven’s recent visit to the region, and the role LNG continues to play in supporting power generation, industrial growth, and economic development around the world. Steven walks us through Excelerate’s newest FSRU, the Acadia, the company’s expanding opportunities in Iraq, and how LNG imports are helping address power shortages and energy deficits across emerging markets. We discuss the future growth of global LNG demand, the increasing shift toward long-term supply contracts, the advantages of floating infrastructure versus traditional onshore facilities, and Excelerate’s strategy of combining LNG supply with downstream infrastructure to open new markets. We also cover Argentina’s Vaca Muerta opportunity, Brazil’s hydro-backed power system, Finland’s experience with energy security following disruptions to regional gas infrastructure, the growing role of U.S. LNG exports, and the support provided by the Trump Administration to promote American energy abroad. Steven shares several personal anecdotes, including helping launch LNG imports into Kuwait, opening new LNG markets across South Asia, visiting customers throughout the Gulf during the recent conflict, and witnessing firsthand how access to reliable energy can transform communities and economies. We covered a great deal and appreciate Steven for sharing his time and insights. Mike Bradley started the show by noting that markets continue to be driven almost entirely by on-and-off developments in the Middle East. Market sentiment last week was dominated by optimism that Iran and the U.S. were moving toward a Strait of Hormuz resolution, but this week has started with growing concern that a resolution may not be just around the corner. On the bond market front, the 10-year bond yield was trading at ~4.5% (up 6-7bps), driven by an Iranian resolution being pushed further to the right and constructive economic data. He noted that the May ISM Manufacturing report showed that U.S. manufacturing expanded at its fastest pace in four years. On the crude oil market front, WTI prices spiked ~$6/bbl (to $93/bbl) on concerns that an Iranian resolution could be delayed. The Strait of Hormuz needs to reopen quickly or risk global oil prices moving substantially higher, as oil markets enter the higher-demand summer months with critically low inventory levels. From an energy equity perspective, the Energy sector was up ~2% so far this week after a 5% pullback last week. On the broader equity market front, markets were modestly weaker as investors appeared unprepared for the prospect of an Iranian resolution being pushed further into the future. He ended by highlighting two IPOs scheduled to price over the next two weeks. Equity investors are most excited about the SpaceX IPO (expected to price next week at a ~$2T valuation). He also highlighted INNIO Holdings, a gas power system manufacturer that is expected to price later this week (raising ~$2B at a ~$20B valuation), which should provide a good read on how bullish sentiment remains across the engine manufacturing and distributed generation segments. Mark Castiglione added his questions and perspective to the discussion as well.