8-K: Stabilis Secures 10-Year LNG Deal with Carnival

Stabilis Solutions announced a 10-year agreement with Carnival Corporation to supply Liquefied Natural Gas for cruise operations at the Port of Galveston, marking its second anchor offtake deal for the planned facility.

Summary

• Stabilis Solutions, Inc. (SLNG) has executed a definitive 10-year offtake agreement with Carnival Corporation & plc.
• The agreement is for the supply of Liquefied Natural Gas (LNG) to support Carnival's cruise operations at the Port of Galveston.
• This represents the second anchor offtake agreement for Stabilis's planned flagship LNG liquefaction facility in Galveston, Texas.
• The total contracted offtake for the Galveston LNG project now stands at approximately 55% of the facility's planned capacity.
• Deliveries under the Agreement are expected to commence in the fourth quarter of 2027.
• The agreement is subject to the successful financing and construction of the Galveston LNG facility and other conditions precedent.
• Stabilis plans to utilize its proposed Jones Act-compliant LNG bunkering vessel for deliveries.
• Stabilis aims for a Final Investment Decision (FID) during the first quarter of 2026.
• FEL-3 engineering design has been completed, and long-lead equipment for the project has been secured.

Sentiment

Score: 8

Explanation: The announcement of a 10-year offtake agreement with a major client like Carnival, bringing the planned facility to 55% contracted capacity, is a strong positive indicator for the project's viability and future revenue streams. However, the project is still subject to financing and construction, introducing some execution risk.

Positives

• Secured a significant 10-year definitive offtake agreement with Carnival Corporation, a major global cruise operator.
• This agreement is the second anchor offtake, bringing the total contracted capacity for the planned Galveston LNG facility to approximately 55%.
• Demonstrates strong commercial momentum and expanding interest from a broad range of potential customers for the Galveston LNG project.
• Carnival views Stabilis as a trusted partner, expanding their existing two-year relationship for LNG fueling operations.
• Completion of FEL-3 engineering design and securing long-lead equipment indicates substantial progress towards the construction schedule.

Risks

• Actual results may differ from expectations, estimates, and projections presented or implied in forward-looking statements.
• Future performance of Stabilis is subject to various factors, including future demand for and price of LNG.
• Availability and price of natural gas could fluctuate.
• Unexpected costs may arise during the project's development and operation.
• The availability and timing of financing, as well as the terms of financing, are critical for the project's success.
• Ability to achieve the conditions precedent to the Agreement and to other bunkering agreements associated with the planned LNG facility.
• Ability to achieve additional offtake necessary for the Final Investment Decision (FID).
• Potential for construction delays or cost overruns for the Galveston LNG facility.
• Regulatory or other legal impediments could impact the project.
• General economic conditions may affect the project's viability and market demand.

Future Outlook

Stabilis expects to commence LNG deliveries from its planned Galveston facility in the fourth quarter of 2027, contingent on successful financing and construction. The company anticipates reaching a Final Investment Decision (FID) in the first quarter of 2026 and continues to observe strong commercial momentum, with approximately 55% of the facility's planned capacity now contracted.

Management Comments

• Casey Crenshaw, Executive Chairman and Interim President & Chief Executive Officer: "Our multi-year LNG bunkering agreement with Carnival Corporation marks another meaningful milestone as we advance toward construction of our proposed Galveston LNG facility. With long-term customer commitments now in place for approximately 55% of the facility's planned capacity, we continue to see strong commercial momentum and expanding interest from a broad range of potential customers."
• Michael McNamara, Vice President Global Fuel Supply (Carnival): "Stabilis has been a trusted partner for the past two years, supporting our successful fueling for LNG cruise ship operations in Galveston. We are excited to expand our partnership with Stabilis, reinforcing our shared commitment to delivering safe and reliable LNG supply to our fleet."

Industry Context

This agreement underscores the accelerating shift within the maritime industry, particularly among major cruise lines, towards Liquefied Natural Gas (LNG) as a cleaner alternative fuel. This trend is driven by increasing environmental regulations and corporate sustainability goals. The deal positions Stabilis Solutions as a significant provider in the growing LNG bunkering market, especially within the strategically important U.S. Gulf Coast region, catering to the expanding fleet of LNG-powered vessels.

Comparison to Industry Standards

• The filing does not provide specific quantitative data points or direct comparisons to other companies' projects or results to assess against global benchmarks.

Stakeholder Impact

• Shareholders: Positive impact due to secured long-term revenue, reduced project risk, and significant progress towards a Final Investment Decision for a major growth project.
• Customers (Carnival): Ensures a reliable, long-term supply of LNG for their cruise operations in Galveston, supporting their clean energy initiatives and operational stability.
• Employees: Potential for job creation related to the construction and future operation of the Galveston LNG facility and associated bunkering services.
• Financing Partners: Provides greater certainty and reduces risk for potential investors and lenders considering participation in the Galveston LNG project's financing.

Next Steps

• Stabilis will continue to work with its advisors and financing partners to secure project financing.
• Achieve a Final Investment Decision (FID) for the Galveston LNG facility during the first quarter of 2026.
• Successful construction of the Galveston LNG facility and the proposed Jones Act-compliant LNG bunkering vessel.
• Commence LNG deliveries to Carnival Corporation in the fourth quarter of 2027.
• Secure additional offtake agreements to contract the remaining capacity of the Galveston LNG facility.

Key Dates

Recommendation

The definitive 10-year offtake agreement with Carnival Corporation significantly de-risks Stabilis's planned Galveston LNG facility by securing 55% of its capacity. This long-term contract with a reputable client provides a strong foundation for future revenue and enhances the likelihood of successful project financing and a Final Investment Decision. This development is a substantial positive catalyst for the company's growth trajectory in the clean energy sector, warranting a 'buy' recommendation.

Keywords

LNG, Liquefied Natural Gas, Marine Bunkering, Galveston, Carnival Corporation, Stabilis Solutions, Offtake Agreement, Cruise Operations, Clean Energy, Energy Solutions, Texas, Port of Galveston, SLNG