Increased investment and activity predicted for floating LNG market

 09 Jan 2014 10.19am

Expenditure in the FLNG market is set to increase to $64.4 billion in 2020 according to the latest market report from energy research group Douglas-Westwood (DW).

The majority – 66% - is attributed to liquefaction infrastructure, with the remainder from import and regasification facilities.

The report anticipates more floating regasification units will be sanctioned, especially in Asia and Latin America. 

Last month, Shell’s FLNG facility was floated out of dry dock in South Korea. Once complete, Prelude FLNG – due to be anchored 200km (125 miles) off Australia’s north-west coast - will be the largest floating facility ever built producing around 3.6 million tonnes of LNG per annum.

However, in North America, the discovery of large supplies of shale gas has resulted in the shut-down of many of its operational terminals and the cancellation of upcoming import facilities. 

The development should see the reversal of North America’s traditional status as a net gas importer to that of an exporter.

“The previous seven-year period saw minimal investment in floating liquefaction infrastructure, but now with the introduction of floating LNG vessels global FLNG Capex is expected to increase significantly over the next seven years,” said report author Amanda Tay. 

“Year-on-year growth over this period is forecast to average 64% per annum and DW expects the increase to be more pronounced after the successful start-up and operation of the pioneer FLNG vessels, such as Shell’s Prelude FLNG and Petronas’ PFLNG 1.”

“While there are inherent risks, FLNG is undoubtedly a prospective market that in the long-run is poised to drive many future gas developments,” added report editor Murray Dormer.

“When compared to its onshore alternative, FLNG offers higher security, a cheaper alternative, shorter lead time and the ability to monetise stranded gas fields.”

  Oil, Gas and Chemical Handling, Port Planning