Page 48: of Maritime Reporter Magazine (March 2018)

world yearbook

Floating Liquefaction and Regasification Floating Liquefaction and Regasification Floating Liquefaction and Regasification

MA/WER has launched a new report they still represent a small portion of in- ceed with the $8.4 billion Coral South pled with a lack of developer ? nancial series and online database that tracks stalled capacity. FLNGs in service and FLNG project testi? es to the strength of strength. While there are some impor- and evaluates ? oating liquefaction and on order account for 4% of LNG plant the FLNG sector. tant positives, including strong govern-

Iregasi? cation projects in the planning capacity scheduled to be operational in FSRU demand has remained very ment support and lack of alternative gas stage. We track all known planned proj- 2021/22. FSRUs account for 20% of strong. Since the beginning of 2013 an monetization paths, we rate this project ects and apply success factors to rate the global regasi? cation capacity scheduled average of six new FSRU projects have as having less chance of moving forward potential of each to pass the investment to be operational by 2021. been funded annually. During 2017 there to development. This rating will be up- hurdle. Some highlights from the new were nine FSRU orders. graded if and when the project developer report and database are provided below. Outlook for New LNG Facilities Looking forward we expect an uptick arranges the ? nancing package.

Investment appetite for LNG projects in orders for both FLNGs and FSRUs. A similar analysis is made for each

Future LNG Demand has been dampened by the near term The question is which projects now in the FSRU terminal in the planning stage.

Global demand for natural gas is ex- imbalance of LNG supply and demand. planning stage are most likely to success- Here we evaluate the project demand pected to grow at an annual rate of 1.5 to LNG plant construction has outpaced fully move to a ? nal investment decision. drivers, strength of the project promoter, 2% over the next 25 years – driven by the demand growth and additional capacity gas offtaker strength, whether there is economic and environmental advantages scheduled to come on line over the next Likely vs. Unlikely Projects an alternative source of gas and project of natural gas as feed for heat and power several years will add capacity to a mar- There are numerous FLNG and FSRU do-ability. The latter includes the invest- production. ket already saturated. This has caused projects in the planning stage. Not all ment needed in downstream infrastruc-

Much of future gas demand growth many planned LNG projects – land and will move to development. To sort the ture, access to project ? nance, dif? culty will be in locations where gas delivery ? oating – to be placed on hold. likely from the unlikely we developed in obtaining permits and licenses, need by pipeline is either uneconomic or im- But the excess supply of LNG is soon a methodology to rate projects based on to involve multiple offtakers to achieve practicable. These locations, primarily in to be wiped out by increasing demand – speci? c “success drivers”. critical offtake mass, government sup-

Asia and Europe, will produce a growing and willingness to invest in new LNG liq- Success drivers for FLNG projects port of the terminal project, etc. As with requirement for natural gas in refriger- uefaction capacity will strengthen from include project cost (gas processing re- FLNG projects, we assign a positive, ated liquid form – which will generate 2021 onwards as global LNG demand quirement, gas quality, upstream loca- neutral and negative rating to the drivers demand for additional LNG production catches up to LNG supply. By the early- tion, FLNG site conditions, FLNG size, in each planned terminal project. capacity and need for new import/re- 2020s we expect many of the shelved etc) and whether ? oating liquefaction gasi? cation terminals. LNG projects to come back to life. represents the only practical method The Big Picture

Some of the LNG projects over the next of commercializing the gas reserves to Overall, we expect a growing number

Floating vs. Land Facilities decade will be land-based facilities with which it is linked. Then there are key of FLNG and FSRU projects to reach the

LNG liquefaction and regasi? cation multiple trains capable of 8+ mtpa out- stakeholder criteria – promoter strength, investment decision over the next ? ve to has historically been done in land-based put. Some, perhaps many, will be smaller government support and buyer strength. ten years. This is a very robust market plants and terminals. But ? oating facili- LNG projects utilizing ? oating plants We assign a positive, neutral or nega- sector that has lots of room to grow. ties are now recognized as having ad- with 1 to 4 mtpa production capability. tive rating to the success drivers in But the competition for investment vantages over land-based alternatives in Even in the current saturated market, each project. Together these ratings funding will be strong – and only some many situations. FLNG projects continue to attract invest- indicate the probability that a project of the projects in the planning stage will

Despite the growing number of ? oating ment funding. The investment decision will make the investment hurdle and make the investment hurdle.

LNG Plants and regasi? cation terminals, in June 2017 by ENI and partners to pro- move to development. The ratings are The IMA/WER monthly FLNG/FSRU continuously updated in the database as report and online database provides an

Floating Liquefaction Plants conditions change. analytical tool for professionals in the

FLNGs can be positioned over a shallow or deepwater offshore gas reservoir, elimi-

For example, in our evaluation of the LNG business. We track the status of all nating the need for a subsea pipeline to a shore-based land plant. LNG produced on

Greater Tortue project in Senegal/Mauri- ? oating liquefaction and regasi? cation the FLNG is stored in special cryogenic tanks and directly transferred to an LNG carrier tania, where several FLNGs are planned projects – and provide a continuously for global delivery. FLNGs can be relocated when the reservoir is no longer economical to be employed, we have given a posi- updated evaluation of which projects to produce. Four FLNGs have been completed. One is in service, two are being com- tive rating to most of the project attri- will make the funding hurdle, which will missioned and one is available. Two more are under construction. Looking forward, butes. The upstream site is in deep water, have dif? culty doing so. 31 ? oating liquefaction projects are at various stages of planning and design. All have which is a negative. But this is offset by the potential of becoming FLNG contracts. Ten of the planned projects are in Africa, the lack of alternative commercialization six in Australia, ? fteen in other areas of the world. options apart from LNG, support of the

Floating Regasi? cation Terminals – FSRUs can be positioned in a port or moored two governments and a determined BP offshore to receive, store and regasify LNG. An FSRU-based import terminal is gener-

For more information contact: as development operator and offtaker. ally quicker to build and easier to ? nance than a land-based terminal. Like FLNGs, an

Overall we rate the chances of success of

FSRU can be relocated when the import requirement changes. this project proceeding as high.

Jim McCaul @

Twenty four FSRU terminals are in operation and 4 FSRUs are available for terminal

In contrast, the success potential of [email protected] contracts. Another 18 FSRU terminals are under construction. In the planning stage the planned Fortuna FLNG project is are 43 FSRU terminal projects. Thirteen of these planned terminals are in SW Asia, 7 negatively impacted by its deep water Jean Vertucci @ are in SE Asia, 6 in Africa, 6 in So America and 11 elsewhere. location and lack of liquid leg – cou- [email protected] 48 Maritime Reporter & Engineering News • MARCH 2018

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