FLOATING

TO THE
RESCUE

Co-Produced with:

fpsoworldcongress.com
 INTRODUCTION:

During a period of extreme volatility

and turmoil in energy markets, the
Floating LNG sector is experiencing a
revival of sorts.

Floating to For floating liquefaction projects

(FLNGs) , the combination of increased
the Rescue operational confidence and a step-
change in LNG demand is contributing
to the sector’s resurfacing.

For floating storage and regasification units (FSRUs), the time has
probably never been better - their speed of deployment and
Europe’s long-term focus to move away from fossil fuels make
them the perfect stop-gap measure to facilitate additional LNG
imports in the wake of Russia’s invasion of Ukraine, thereby
contributing to the continent’s energy independence from Russia
and their energy security.

This paper will explore recent progress in FLNG and FSRU projects,
highlighting their advantages and their role in rapidly delivering LNG
to an LNG-deficit world.

*Note that we do not consider FSUs or FRUs in this paper.

 FLOATING LIQUEFACTION (FLNG)
*Originally 1.2 Mtpa, capacity expanded to 1.4 mtpa by 2022 out of a maximum 2.4 Mtpa
Locations for illustration only, may not be accurate
Source: Rystad Energy GasMarketCube

There are currently 5 operational FLNG vessels with a combined

capacity of over 8 Mtpa; PFLNG 1, PFLNG 2, Tango (currently idle),
Prelude, and Golar Cameroon.

After the oil price crash in 2015, the FLNG sector has gone through a
somewhat quiet period with only Coral and Greater Tortue Ahmeyim
being sanctioned.

However as LNG demand grows and countries look to monetise gas

resources quickly amid longer-term uncertainty, there is a renewed
focus on FLNG in the years to come. By 2024, FLNG capacity is
forecast to exceed 14 Mtpa.

In total, over 17 Mtpa of projects are at the planning stage (and a

further 18 Mtpa worth at very preliminary stages of development),
and as the industry has gained experience in FLNG operations, the
concept will have an increasing role to play in meeting future LNG
demand, which is expected to grow from 385 Mtpa in 2021 to 708
Mtpa in 2040, peaking around 2037 at 724 Mtpa.
CHALLENGES

Despite the challenges faced by Prelude FLNG as a pioneering

project, the exceptional operational performance of Petronas FLNG
1 and 2, and especially Golar Cameroon (which was converted from a
retired LNG tanker), were critical to building confidence in what was
once considered a frontier technology.

FLNG projects have demonstrated operability across a wide range

of upstream field types from onshore to deep water - and with the
startup of Coral FLNG in 2022, will have demonstrated operability in
Ultra-deepwater as well.

Ongoing FLNG developments are concentrated in 2 key regions of

West Africa and Malaysia - both suited to support LNG demand
centers of Europe and East Asia respectively.
ADVANTAGES
OF FLNG

Deployment:

• Smaller/fewer offtake commitments

required before FID provides more
certainty to buyers

• Project derisked through faster

sanctioning and accelerated execution:
Converted FLNG construction time ~3
years; onshore facility construction time
~4.7 years on average

• With the existing infrastructure,

available FLNGs can be onsite within
months with minimal refurbishment

Economics

• Competitive with land-based projects

on liquefaction capex/tonne basis

• Further cost reductions achievable

with the conversion from existing
tankers and standardisation

• Faster payback period from lower

costs and execution speed

• Redeployable to multiple stranded

/remote resources/ associated gas
production

• Extensive pipelines are not required;

any existing infrastructure can be
utilised
Operational flexibility

• Shift location during extreme

weather events to minimise
damage and downtime (similar to
FPSOs)

• Faster loading operations from

avoided port congestion

EEXI/CII regulations

• Likely to affect ~200 steam

turbine propulsion carriers, some
DFDE carriers and SSD propulsion
carriers after implementation in
2023

• Conversion to FLNG / FSRUs can

extend asset lifetime by decades;
operational experience so far with
Golar Cameroon FLNG has been
overwhelmingly positive
 FLOATING STORAGE &
REGASIFICATION (FSRU)

*Locations for illustrations only

Source: Rystad Energy GasMarketCube

The recent focus on FSRUs is driven by additional LNG demand in

Europe as they seek to reduce Russian pipeline gas.

Accordingly, EU companies, mandated by their governments, are

believed to be seeking FSRUs for deployment in under 3 years.
Europe has 18 FSRUs in the pipeline, of which 14 have gained
momentum or been reactivated from a deep slumber after the
invasion. Netherlands’ Gasunie made the opening move, chartering
Exmar’s barge-based S188 FSRU for a 5 year period.

FSRUs are being snapped up at eye-watering rates. In March,

Tradewinds reported fixtures for Dynagas’ fixtures with Uniper at
$200k/day, while Hoeghs’ fixture with RWE is reported to be for
$180K/day. A year ago FSRU rates were about to plunge below the
$100k/day mark.
 UPCOMING FSRU
PROJECTS

S/N Start Capacity

Country Project Status Infrastructure Ownership
O
Year (Mtpa)

1 Albania Vlora FSRU Planned 2023 2.5 Excelerate Energy

2 Estonia Paldiski LNG Planned 2022 1.8 Alexela
3 Germany Wilhelmshaven FSRU Planned 2024 7.4 Uniper
4 Germany Brunsbuettel Planned 2025 5.9 German Federal Govt, Gasunie
5 Greece Alexandroupolis Under construction 2023 4.0 Gastrade S.A., Bulgartransgaz
6 Greece Argo Planned 2023 3.4 Mediterranean Gas, ExxonMobil
7 Greece Thrace INGS Planned 2025 4.0 Gastrade S.A.
8 Netherlands Eemshaven Under construction 2022 0.6 Gasunie
9 Poland Gdansk FSRU Planned 2027 3.2 Gaz-System
10 United Kingdom Teeside Planned 2023 5.5 Trafigura
11 Italy Adriatic Sea Planned 2024 3.7 Eni/Snam
12 Italy Tyrrhenian Sea Planned 2023 3.7 Eni/Snam
13 France Le Havre Planned 2024 4.0 Total; Engie
14 Australia Geelong Planned 2023 2.0 Viva Energy
15 Australia Outer Harbour Planned 2024 1.6 Venice Energy
16 Australia Port Kembla Planned 2024 2.0 Squadron Energy
17 Brazil Alunorte Planned 2023 0.5 Golar Power, Norsk Hydro
18 Brazil Porto Central Planned 2023 0.5 Porto Central
19 Brazil Rio Grande Planned 2022 3.8 NextDecade; Excelerate Energy
20 Brazil Sao Paulo Under construction 2023 3.8 Cosan
21 Brazil Suape Planned 2023 2.5 Golar Power
22 Brazil Terminal Gas Sul Under construction 2022 4.0 New Fortress Energy
23 Chile Talcahuano Under construction 2022 4.0 EOS LNG
24 China Hong Kong Under construction 2023 4.0 China Light & Power Co., Ltd; Hongkong Electric Co., Ltd.
25 China Tianjin Under construction 2023 6.0 PipeChina
26 Colombia Buenaventura Planned 2024 3.0 Empresa de Energia de Bogota
27 Cyprus Cyprus FSRU Planned 2023 0.6 DEFA
28 Ecuador Ecuador LNG Planned 2023 1.5 Sycar
29 El Salvador El Salvador FSRU Under construction 2022 0.5 Energía del Pacífico
30 Ghana Tema Under construction 2022 1.7 GNPC; Helios
31 India Jaigarh Under construction 2022 6.0 H-Energy
32 India Gopalpur Planned 2026 4.0 Petronet
33 India Jafrabad Under construction 2023 5.0 Exmar; Gujarat Government; Swan Energy; Tata Group
34 India Karnataka Planned 2025 4.0 LNG Alliance; New Mangalore Port Trust
35 India Kukrahati Planned 2023 2.5 H-Energy
36 India Mumbai Planned 2024 3.5 SP Armada Clean Energy Ventures Private Limited
37 Morocco Morocco FSRU Planned 2025 0.8 Predator Oil&Gas
38 Mozambique Matola Planned 2025 3.7 Total; Gigajoules group
39 Nicaragua Puero Sandino Under construction 2022 1.3 New Fortress Energy
40 Pakistan Energas Under construction 2024 5.6 Energas; Yunus Group
41 Philippines Filipinas LNG Gateway Planned 2023 5.0 Excelerate Energy
42 Philippines Tabangao Planned 2024 3.0 Shell
43 Philippines First Gen Planned 2023 5.0 First Gen LNG; Tokyo Gas
44 Senegal Senegal FSRU Under construction 2022 2.5 Karadeniz Energy Group
45 South Africa Ngqura Planned 2024 4.0 Transnet
46 Vietnam Mui Ke Ga Planned 2025 1.5 Energy Capital Vietnam, B. Grimm Power
47 Germany Stade FSRU Under construction 2025 4.5 TBC
48 Germany Rostock FSRU Under construction 2025 4.5 TBC
49 Netherlands Eemshaven FSRU Under construction 2023 5.0 Gasunie
50 Finland Baltic Sea FSRU Under construction 2023 3.6 Gasgrid Finland

Source: Rystad Energy GasMarketCube

 ADVANTAGES
OF FSRU

There are few use cases better suited to FSRUs than Europe’s
situation today: a step-change in LNG demand of between 20-40
Mtpa through 2030, while Russian gas supplies are phased down.
Other forms of material demand control are likely to be years away -
be it accelerated renewables deployment, or scaling up of battery
storage (which requires access to energy metals) and hydrogen. In
cases where supporting infrastructure already exists, FSRUs can be
deployed in less than a year.

FSRUs can bridge Europe’s energy needs with minimal impact on

their long-term emissions bottom line: upon expiry of the 5 or 10
years (negotiable) charter period, they can be redeployed to other
regions, and the minimum supporting infrastructure they need
(pipeline, jetties) decommissioned easily. They can also be operated
on a seasonal basis, regasifiying LNG for part of the year and
operating as a tanker for the rest (such as the Tianjin FSRU Hoegh
Esperanza).
From an economics perspective, leased FSRUs work out to be more
competitive on a lifetime cost basis than onshore terminals for
operational lifetimes of around 6 years - which gives EU
governments an idea of by when they would scale up renewables
deployment. The FSRU concept has also been tried by some
countries in emerging Asia, that have tested their LNG consumption
and purchasing strategies before making the decision to go onshore.

Other advantages of FSRUs are

similar to those of FLNGs - their
speed of deployment serves to
de-risk the project, their
operational flexibility allows for
seasonal utilisation, and they also
offer a means to extend the useful
lifetimes of ageing LNG tankers.

CONCLUSION
The LNG sector is probably at the cusp of a boom not seen over the
past decade. Given the urgency of Europe’s LNG demand, FLNGs and
FSRUs will have the opportunity to highlight their advantages
compared to conventional onshore development.
WANT TO KNOW MORE
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The focal point of the conference will be on:

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