Excelerate Energy assures Jamaica of stable LNG prices despite Middle East war

Jamaican consumers and businesses should not see any increase in the cost of liquefied natural gas (LNG) tied to the ongoing Middle East conflict, because supply contracts already signed with the island's main provider, Excelerate Energy, lock in the price.

That assurance came from Excelerate's president and chief executive officer, Steven Kobos, who spoke exclusively with the Jamaica Observer as global commodity markets continue to react to the war.

The World Bank Group is forecasting that oil will climb this year to levels not seen since Russia launched its invasion of Ukraine in 2022, with the conflict in the Middle East rippling through international markets. Overall commodity prices are projected by the bank to rise 16 per cent in 2026, pushed up by sharp gains in energy and fertiliser, along with record highs for a number of key metals.

Jamaica is already feeling the squeeze on the petroleum side. Retail gasolene at local pumps is roughly 20 per cent dearer than it was on February 28, when the hostilities began. LNG, however, has held its line.

Kobos argued that the current turbulence in oil underscores the value of customers locking in LNG supply through firm contracts rather than chasing volumes on the open market.

"Our business model is to be operationally as flawless as possible, have the highest possible reliability, and then we simply believe in doing what we say we will do. We have contracted prices for LNG for our customers and that's what we have been delivering at," said Kobos.

"We haven't tried to take their LNG and run with it to another market. We have been doing what we say we will do. So, frankly, the price that people are paying right now is no higher because of the war," he added.

Buyers who are now scrambling on the spot market, he explained, are paying considerably more because the loss of Persian Gulf shipments has tightened global supply and pushed prices up. None of that pressure, he insisted, is being passed on to Jamaican customers.

"We have contracts, we are honouring those contracts, and the price of those contracts is not impacted by this [war in the Middle East]," said Kobos.

He noted that Europe's Title Transfer Facility (TTF), the main wholesale benchmark for natural gas on that continent, has been spiking because of the conflict, but Jamaica will not see that same trajectory.

Kobos stressed that while developments in the Middle East matter for the world economy, Excelerate's focus remains on delivering energy security to the markets it serves, Jamaica included. Suggestions that the company might quietly redirect LNG cargoes earmarked for the island to a higher-paying buyer elsewhere, he said, have no basis.

"We will not… because — and you may find this hard to believe — but as a company we like to be boring, and we like to be reliable. Some people say boring is the new sexy, because that's who we are," he said, adding that he has already given that message to the Jamaican Government and invited anyone with doubts to check with administrations in other countries where Excelerate has worked for years.

The CEO pointed to the company's response after Hurricane Melissa struck Jamaica last October as evidence of how it views its role. Although Excelerate is a United States-based company with worldwide operations, he said it sees itself as a Jamaican firm and moved quickly behind the scenes to help.

"We want to support the markets we are in when they face extraordinary circumstances, that's how you prove yourself. We believe strongly that you are judged by your deeds, not by your words, and it was obvious that we wanted to act and be judged by our actions, not by our words," Kobos said.

"We were fortunate we had other assets that happened to be in the Caribbean and we were able to immediately load up relief supplies in Panama on the Excelerate Shenandoah, covered its decks and sailed it into Kingston with relief supplies. All told, we mobilised more than US$1.3 million of funding and relief supplies and we had it in the country very quickly."

He said the company regards itself as part of the Jamaican community and accepts an obligation to step in when the country is under strain.