8-K/A: Stabilis Secures 10-Year LNG Deal, Plans Galveston Hub

Stabilis Solutions announced a 10-year agreement to supply LNG for marine bunkering at the Port of Galveston, anchoring plans for a new 350,000 gallon-per-day liquefaction facility.

Summary

• Stabilis Solutions, Inc. has entered into a 10-year agreement with a leading investment-grade global marine operator.
• The agreement is for the supply of approximately 50 million gallons (188,000 cubic meters) per year of Liquefied Natural Gas (LNG) for marine bunkering operations at the Port of Galveston.
• This long-term contract serves as the anchor for the development of a new flagship waterfront LNG liquefaction facility in Galveston, Texas.
• The proposed Galveston LNG facility is expected to have a capacity of 350,000 gallons-per-day, increasing Stabilis' total liquefaction capacity from 130,000 gallons-per-day to 480,000 gallons-per-day.
• The bunkering agreement represents approximately 40% of the Galveston LNG facility's planned capacity.
• Stabilis also plans to commission a dedicated Jones Act-compliant LNG bunkering vessel to provide a fully integrated, last-mile LNG delivery solution for customers in the Port of Galveston and surrounding Gulf Coast markets.
• Deliveries under the agreement are expected to commence in the fourth quarter of 2027, subject to successful financing and construction of the Galveston LNG facility and other conditions precedent.

Sentiment

Score: 9

Explanation: The announcement reflects a highly positive strategic development, securing a long-term, significant contract with an investment-grade client that underpins a major capacity expansion project. This positions Stabilis for substantial growth in a key market.

Positives

• Secured a significant 10-year long-term marine bunkering agreement with an investment-grade global marine operator.
• The agreement provides a crucial anchor contract, covering 40% of the planned capacity, enabling the advancement of the Galveston LNG liquefaction facility.
• The new Galveston facility will significantly increase Stabilis' liquefaction capacity by 350,000 gallons-per-day, expanding market presence in the Gulf Coast.
• The strategic location of the new facility will serve existing cruise customers and new marine end markets like container ships, car carriers, tankers, and bulk carriers.
• Plans for a dedicated Jones Act-compliant LNG bunkering vessel will create a fully integrated, last-mile LNG delivery solution, enhancing service offerings.

Risks

• Future performance of Stabilis may differ from expectations.
• Future demand for and price of LNG are subject to market fluctuations.
• Availability and price of natural gas could impact operations.
• Unexpected costs may arise during project development and operation.
• Availability of financing for the Galveston LNG facility is a condition precedent.
• Ability to achieve the conditions precedent to the bunkering agreement is not guaranteed.
• Ability to achieve additional offtake necessary for Final Investment Decision (FID) for the facility.
• Potential for construction delays or cost overruns.
• Regulatory or other legal impediments could affect the project.
• General economic conditions may impact business operations and project viability.

Future Outlook

Stabilis Solutions anticipates a significant expansion of its Gulf Coast market presence with the new Galveston LNG facility, which is expected to come online in late 2027. The company is actively engaged in discussions to contract the remaining capacity of the Galveston facility and plans to maintain balance sheet discipline and a return-driven approach to capital allocation during this expansionary phase.

Management Comments

• Casey Crenshaw, Executive Chairman and Interim President & Chief Executive Officer, stated, 'Our new 10-year bunkering agreement marks a transformational milestone for Stabilis, one that secures the commercial scale required to advance our investment in liquefaction capacity on the Gulf Coast.'
• Crenshaw added, 'Once the Galveston LNG facility comes online, anticipated in late 2027, it will become our largest liquefaction plant by capacity, significantly increasing our market presence within the Gulf Coast while meeting growing customer demand for reliable, clean marine LNG fueling solutions.'
• Crenshaw also noted, 'In addition to our newly contracted bunkering agreement, Stabilis is also in advanced discussions and negotiations with a diverse base of customers seeking to source LNG from our Galveston LNG facility.'
• Crenshaw emphasized, 'Importantly, this long-term bunkering agreement secures 40% of the planned capacity at the Galveston LNG facility, and we remain in active discussions to contract the remaining capacity.'
• Crenshaw concluded, 'As we advance toward FID on the Galveston LNG facility, we intend to maintain our balance sheet discipline and return-driven approach toward capital allocation. To that end, we are actively engaged with our advisors in finalizing the optimal structure to support this important expansionary phase for Stabilis, consistent with our long-term focus on value creation for both our customers and shareholders.'

Industry Context

This announcement aligns with the broader industry trend of increasing adoption of LNG as a cleaner marine fuel to meet stricter environmental regulations and reduce carbon emissions in the shipping sector. The expansion into the Port of Galveston and the Gulf Coast positions Stabilis to capitalize on growing demand for marine bunkering solutions, particularly as more vessels convert to LNG propulsion.

Stakeholder Impact

• **Shareholders:** Potential for significant long-term revenue growth, increased asset base, and enhanced market position, which could lead to increased shareholder value.
• **Customers:** Provides a reliable, long-term source of clean LNG fuel for marine bunkering, expanding service offerings and geographic reach.
• **Employees:** Potential for job creation related to the construction and operation of the new Galveston facility and bunkering vessel.
• **Local Community (Galveston):** Economic benefits from construction and operational activities, though potential environmental considerations related to an industrial facility.

Next Steps

• Finalize project financing for the Galveston LNG facility by Q1 2026.
• Begin construction of the Galveston LNG facility in early 2026.
• Complete construction of the Galveston LNG facility by Q2 2028.
• Commission a dedicated Jones Act-compliant LNG bunkering vessel.
• Continue advanced discussions and negotiations with other potential customers to contract the remaining capacity of the Galveston LNG facility.
• Advance toward Final Investment Decision (FID) on the Galveston LNG facility.

Key Dates

Recommendation

The announcement of a 10-year, anchor contract with an investment-grade global marine operator, coupled with plans for a significant capacity expansion in a strategic location, represents a transformational growth catalyst for Stabilis Solutions. This move substantially de-risks the new Galveston facility project and positions the company for strong long-term revenue generation and market share growth in the expanding LNG marine bunkering sector. The clear path to increased capacity and secured demand warrants a 'strong buy' recommendation for investors seeking exposure to clean energy infrastructure and marine logistics.

Keywords

LNG, Liquefied Natural Gas, Marine Bunkering, Galveston, Texas Gulf Coast, Stabilis Solutions, SLNG, Clean Energy, Energy Infrastructure, Long-term Agreement, Expansion Project