Page 24: of Maritime Reporter Magazine (February 2023)

FPSO MARKET UPDATE

Copyright Rawf8/AdobeStock and the new ones are very large,” said McCaul, noting that booming, it’s taking off like a bullet due to the Russian cut-off when he started covering the market in the mid-1990s, 60,000 of pipeline gas to Europe,” said McCaul. “[The Russian gas bpd output was typical, whereas the units coming online today cut-off] threw Europe into crisis mode, and that crisis mode are in the 250,000 bpd range. has European governance encouraging companies, if not to do

This effectively raises the scale exponentially on revenue, it directly themselves, to have terminals where you can bring but also on technical complexity. LNG into Europe. The whole slew of orders, since March “They [the oil majors] have dif? culty getting people and 2022. They got them so quickly that it was unbelievable.” companies to bid the contract. There’s been a number of ten- Citing a “tremendous increase in the need for LNG glob- ders that have been canceled because they haven’t had enough ally,” McCaul expects many new FSRU orders globally in ‘23 bids. I think in 2022, the orders would’ve increased faster if and beyond. McCaul expects FSRU orders globally over the capacity had been available.” next few years to be very strong. All of the FSRUs that were being used temporarily for LNG transport were vacuumed … AND THEN THERE IS GAS … up in Q2 after the Russian gas pipeline cutoff. “Supply-

The wildcard since Russia invaded Ukraine in early 2022 ing FSRUs is going to be a good business over the next ? ve is gas, as Russia sought from the beginning to use energy se- years. We see this as a tremendous market. But yard space for curity as a weapon across Europe, by curtailing and eventu- a newbuild FSRU will be a constraint. Yards are full of LNG ally shutting off the pipeline to the continent. Common logic carrier work and the queue for a new FSRU will be pretty long suggested that an energy-starved Europe would cave on sanc- -- 2026+ to get delivery. But could be a great opportunity for tions, particularly as the winter months came and energy pric- LNG owners with older carriers that can be repurposed in a es soared. repair yard for terminal use.”

But a funny thing happened: a warmer than usual winter (so far) conspired to help moderate gas prices, and Europe aggres- O&G & ENERGY TRANSITION: IT’S COMPLICATED sively moved to bring LNG import facilities online to move As if the traditional market and geopolitical forces aren’t its supplies from pipeline to ship delivery. detrimental enough to accurately predicting the speed, pace, “The ? oating storage regasi? cation unit (FSRU) business is and direction of oil and gas prices, enter a still relatively new 24 Maritime Reporter & Engineering News • February 2023

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