FLNG market set for significant growth

More than $60bn to be spent over next seven years

Investment in FLNG is set to increase.
Investment in FLNG is set to increase.

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 $58.3bn 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,” Robertson said.
 

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