Page 30: of Offshore Engineer Magazine (Jan/Feb 2023)

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FEATURE FLOATING PRODUCTION SYSTEMS © Rawf8/AdobeStock ber of shipyards that have drydocks big enough to accom- “The ?oating storage regasi?cation unit (FSRU) busi- modate the units. ness is booming, it’s taking off like a bullet due to the “There are only so many contractors that can take these Russian cut-off of pipeline gas to Europe,” said McCaul. orders, as ?rst of all, the unit itself, the FPSO is compli- “[The Russian gas cut-off] threw Europe into crisis mode, cated, and the new ones are very large,” said McCaul, not- and that crisis mode has European governance encourag- ing that when he started covering the market in the mid- ing companies, if not to do it directly themselves, to have 1990s, 60,000 bpd output was typical, whereas the units terminals where you can bring LNG into Europe. The coming online today are in the 250,000 bpd range. whole slew of orders, since March 2022. They got them so

This effectively raises the scale exponentially on revenue, quickly that it was unbelievable.” but also on technical complexity. Citing a “tremendous increase in the need for LNG glob- “They [the oil majors] have dif?culty getting people ally,” McCaul expects many new FSRU orders globally in and companies to bid the contract. There’s been a number ‘23 and beyond. McCaul expects FSRU orders globally over of tenders that have been canceled because they haven’t the next few years to be very strong. All of the FSRUs that had enough bids. I think in 2022, the orders would’ve in- were being used temporarily for LNG transport were vacu- creased faster if capacity had been available.” umed up in Q2 after the Russian gas pipeline cutoff. “Sup- plying FSRUs is going to be a good business over the next … AND THEN THERE IS GAS … ?ve years. We see this as a tremendous market. But yard

The wildcard since Russia invaded Ukraine in early space for a newbuild FSRU will be a constraint. Yards are 2022 is gas, as Russia sought from the beginning to use full of LNG carrier work and the queue for a new FSRU will energy security as a weapon across Europe, by curtailing be pretty long -- 2026+ to get delivery. But could be a great and eventually shutting off the pipeline to the continent. opportunity for LNG owners with older carriers that can be

Common logic suggested that an energy-starved Europe repurposed in a repair yard for terminal use.” would cave on sanctions, particularly as the winter months came and energy prices soared.

O&G & ENERGY TRANSITION:

But a funny thing happened: a warmer than usual winter

IT’S COMPLICATED (so far) conspired to help moderate gas prices, and Europe As if the traditional market and geopolitical forces aren’t aggressively moved to bring LNG import facilities online detrimental enough to accurately predicting the speed, to move its supplies from pipeline to ship delivery. pace, and direction of oil and gas prices, enter a still rela- 30 OFFSHORE ENGINEER OEDIGITAL.COM