Floating LNG Industry Set for Landmark Project Start-ups and Further New Wave of Growth
There will be significant growth in both investment and activity in the FLNG market over the next seven years, with
Douglas-Westwood (DW) forecasting total expenditure of $58.3 billion (bn) in its new market report. 61% of this spend is
attributed to liquefaction infrastructure, with the remainder from import and regasification facilities.
Report author, Ben Wilby, commented, The industry is about to see the installation of the first floating liquefaction
projects. The application of LNG technology offshore has been proposed and studied within the industry for more than 30
years so there is intense industry interest in the first applications. The success of these first pioneering projects will no
doubt impact future commitments by operators to FLNG developments.
There are now many projects on the starting blocks awaiting a final investment decision by the operator. In 2015 we
expect something of a pause in new commitments given both the first in the line to be second approach to the
technology and the Capex cutbacks we have seen as a function of lower oil and gas prices.
Operators are attracted to FLNG as when compared to its onshore alternative, FLNG facilities are more secure, can have
shorter lead-times, remove the need for long pipeline to shore, and offer a potentially lower-cost alternative to monetising
stranded gas fields. While there are inherent risks, FLNG is undoubtedly a prospective market that in the long-run is
poised to drive many future gas developments.
Steve Robertson, report editor, concludes, We are likely to see a dip in industry expenditure in 2018 as the first
installations are completed and then a second wave of projects move into execution near the end of the decade which
will then drive spend to new heights. These yet-to-be-sanctioned projects are targeting stranded gas assets in
Australasia, Asia, Gulf of Guinea, East Africa and the East Mediterranean.
We also expect more floating regasification units to be sanctioned, with Asia and Latin America being the dominant
regions. Upcoming projects are visible in Indonesia, China, Pakistan, India, Vietnam, Bangladesh and Sri Lanka, mostly
led by National Oil Companies. Latin America will see deployments of floating regas units in Chile and Puerto Rico.
Despite a current pause in commitments to new projects, the capital expenditure (Capex) for FLNG vessels is expected to amount to $35.5bn over 2015-2021. Spending on FSRUs will total $22.8bn over the same period, taking the combined expenditure for the Floating LNG market to $58.3bn.
There is a huge interest in the pioneering projects that will drive market spend over the coming years. Future commitments by operators to the FLNG market hinges on the success of these pioneering projects.
The delivery of Petronas PFLNG 1, also known as the PFLNG SATU, will be the worlds first FLNG vessel to start operations on its completion by the end of 2016. This will be followed by Shells Prelude FLNG vessel, a significantly larger project and one that is likely to shape future FLNG developments. Construction of the 488 metres long facility started in 2012 (the unit is being built by Samsung in Korea) and is expected to start up by 2017.
Following these projects is a second wave of new projects that are yet to be sanctioned but are expected to drive a growth in expenditure from 2019 onwards. This includes major projects in frontier regions such as East Africa.
DW anticipates more floating regasification units are to be sanctioned, with Asia and Latin America being the dominant regions. Upcoming projects are visible in Indonesia, China, Pakistan, India, Vietnam, Bangladesh and Sri Lanka, mostly led by National Oil Companies. Latin America will see deployments of floating regas units in Chile and Puerto Rico.
The World FLNG Market Forecast 2015-2021 forecasts activity through to 2021 and contains analysis of:
Market Drivers and Trends including the monetisation of stranded gas reserves, security of supply, onshore terminal costs, environmental solutions and increasing long-term gas demand.
The FLNG Supply Chain operators, FLNG leasing, EPC contractors, vessel yards, topside sub-contractors and financing analysis.
FLNG Import and Export Capacity prospective installations 2015-2021, along with DWs forecast for the required Capex to bring this capacity online. This includes construction of base-load FLNG liquefaction and import (regasification) vessels.
Capex Breakdowns expenditure for liquefaction and regasification vessels segmented by component looking at topsides, hull & containment systems and mooring & transfer systems. And by service, including technology licencing, FEED, detailed design engineering, construction engineering, installation, hook-up & commissioning and construction of hull & topsides.
Regional analysis Africa, Asia, Australasia, Eastern Europe & FSU, Latin America, Middle East, North America and Western Europe.
Why purchase the FLNG Market Forecast?
Our market forecasting is trusted by sector players worldwide, with clients including the worlds top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms. Our proven process includes:
Unique and proprietary data updated year-round from published sources and insight gained from industry consultation.
Methodology the report uses research from DWs proprietary World LNG Projects Database, an in-house information system exclusive to DW. Our global analyst team is involved in the gathering and analysis of FLNG market data through primary research and professional networks. A project-by-project review of development prospects drives a data-rich market model and forecast; with the timing of expenditure phased to reflect the commercial structures of likely projects.
Market forecasts comprehensive examination, analysis and 14-year coverage of FLNG expenditure.
Concise report layout consistent with DWs commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review with speed-read summaries of key points throughout.
An essential report for engineering houses, contractors, shipping companies, vessel lease operators, shipbuilders, oil & gas operators, gas utilities and financial institutions wanting to better understand where and when to make investment decisions.
1 Summary and Conclusions7
2 Why Floating LNG? 10
Floating Liquefaction Market Drivers 11
Onshore & FLNG Comparison & Definitions 12
Floating Liquefaction Onshore Cost Comparison 13
The History of Floating LNG 14
Floating Regasification Market Drivers 15
3 Floating Liquefaction 16
LNG FPSO 18
Containment Systems 19
LNG FPSO Process Diagram 20
Liquefaction Plant Process Flow 21
Liquefaction Technology 22
Offloading to Regasification Vessels 23
4 Floating Regasification 24
FSRU & Regasification Vessels 25
Topsides & Regasification Process 26
Destination LNG Offloading 27
5 FLNG Supply Chain 28
LNG FPSO Supply Chain: Pre-FEED/FEED 29
LNG FPSO Supply Chain: EPC 30
Floating LNG Regasification Supply Chain 31
LNG Business Model 33
Shipyard Review 34
Leasing Contractors Floating Liquefaction 35
Leasing Contractors Floating Regasification 36
6 FLNG Projects 37
Oil Price Impact on FLNG Projects 38
Floating Regasification 39
Floating Liquefaction Projects 40
Pioneer FLNG Projects 41
7 Market Forecast 42
8 Appendix 60
Conversion Tables 61
Prospective Floating Regasification Vessels 62
Data and Text Conventions 64
Table 1: Conventional FPSO Components 18
Table 2: Typical Natural Gas Composition 20
Table 3: Floating Liquefaction Lease Contractors and Operators 35
Table 4: Floating LNG Projects by Status and Year 40
Table 5: Prelude, PFLNG and FLSRU Vessel Details 41
Table 6: Capex on FLNG Liquefaction Vessels by Region 2014-2021 45
Table 7: Capex on FLNG Liquefaction Vessels by Component 2014-2021 46
Table 8: Capex on FLNG Liquefaction Vessels by Service 2014-2021 46
Table 9: Capex on FLNG Import Vessels by Region 2014-2021 47
Table 10: Capex on FLNG Import Vessels by Component 2014-2021 48
Table 11: Capex on FLNG Import Vessels by Service 2014-2021 48
Table 12: Global Capex on FLNG Facilities by Component 2014-2021 49
Table 13: Global Capex on FLNG Facilities by Service 2014-2021 49
Table 14: Global Capex on FLNG Facilities by Region 2014-2021 50
Table 15: Global Capex on FLNG Facilities by Type 2014-2021 51
Table 16: Capex on FLNG Facilities in Africa by Type 2014-2021 52
Table 17: Capex on FLNG Facilities in Asia by Type 2014-2021 53
Table 18: Capex on FLNG Facilities in Australasia by Type 2014-2021 54
Table 19: Capex on FLNG Facilities in Australasia by Country of Service 2014-2021 54
Table 20: Capex on FLNG Facilities in Eastern Europe & FSU by Type 2014-2021 55
Table 21: Capex on FLNG Facilities in Latin America by Type 2014-2021 56
Table 22: Capex on FLNG Facilities in Middle East by Type 2014-2021 57
Table 23: Capex on FLNG Facilities in North America by Type 2014-2021 58
Table 24: Capex on FLNG Facilities in Western Europe by Type 2014-2021 59
Table 25: Conversion Table 61
Table 26: Prospective Floating Regasification Vessels 62Figure 1: Global Capex on FLNG Facilities by Region 2014-2020 8
Figure 2: Percentage Regional Comparison on FLNG 2014-20208
Figure 3: Top 10 countries with Proven Natural Gas Reserves (as at end 2013) 11
Figure 4: Process Diagram of the LNG chain 12
Figure 5: Onshore vs Offshore Liquefaction Indicative Terminal Total Costs 13
Figure 6: Onshore vs Offshore Liquefaction Terminal Capex 13
Figure 7: LNG Capital Costs 13
Figure 8: History of Floating LNG 14
Figure 9: Overview of Operational and Future LNG Facilities 14
Figure 10: Gas Consumption by Region 2005-2030 15
Figure 11: LNG FPSO Layout 18
Figure 12: Sloshing Inside a Tank 19
Figure 13: LNG Facility Liquefaction Process Flow 21
Figure 14: Single Train Capacity for Several Liquefaction Process 22
Figure 15: FSRU Topside Process 26
Figure 16: Submerged Combustion Vaporiser (Closed Loop) 26
Figure 17: Schematic of the Sea Water Vaporiser (Open-loop) 26
Figure 18: LNG FPSO Pre-FEED & FEED Supply Chain 29
Figure 19: LNG FPSO EPC Supply Chain 30
Figure 20: Floating LNG Regasification Supply Chain 31
Figure 21: Typical Finance Project Structure 32
Figure 22: LNG FPSO Simplified Business Model 33
Figure 23: Henry Hub Gas, West Texas Intermediate FOB & Europe Brent Spot Prices 38
Figure 24: Global Floating Regasification Fleet 39
Figure 25: Focus areas for FLNG export project development 40
Figure 26: Shell Prelude FLNG 41
Figure 27: Petronas PFLNG 1 41
Figure 28: Columbia FLSRU 41
Figure 29: Components of an FLNG vessel 44
Figure 30: Capex on FLNG Liquefaction Vessels by Region 2008-2021 45
Figure 31: Capex on FLNG Liquefaction Vessels by Component 2008-2021 46
Figure 32: Capex on FLNG Liquefaction Vessels by Service 2008-2021 46
Figure 33: Capex on FLNG Import Vessels by Region 2008-2021 47
Figure 34: Capex on FLNG Import Vessels by Component 2008-2021 48
Figure 35: Capex on FLNG Import Vessels by Service 2008-2021 48
Figure 36: Global Capex on FLNG Facilities by Component 2008-2021 49
Figure 37: Global Capex on FLNG Facilities by Service 2008-2021 49
Figure 38: Global Capex on FLNG Facilities by Region 2008-2021 50
Figure 39: Global Capex on FLNG Facilities by Type 2014-2021 51
Figure 40: Capex on FLNG Facilities in Africa by Type 2014-2021 52
Figure 41: Capex on FLNG Facilities in Asia by Type 2014-2021 53
Figure 42: Capex on FLNG Facilities in Australasia by Type 2014-2021 54
Figure 43: Capex on FLNG Liquefaction Vessels by Country of Service 2014-2021 54
Figure 44: Capex on FLNG Facilities in Eastern Europe & FSU by Type 2014-2021 55
Figure 45: Capex on FLNG Facilities in Latin America by Type 2014-2021 56
Figure 46: Capex on FLNG Facilities in Middle East by Type 2014-2021 57
Figure 47: Capex on FLNG Facilities in North America by Type 2014-2021 58
Figure 48: Capex on FLNG Facilities in Western Europe by Type 2014-2021 59