In the build up to CWC’s World LNG Summit & Awards Evening, to be held in Barcelona, Spain, on 12 – 15 December 2016, CWC interviewed Patrick Janssens, Vice President, Global Gas Solutions, ABS.
Regarding floating storage and regasification units (FSRUs), how much potential is out there in terms of unlocking new demand and where will this demand come from?
The LNG supply is growing fast. Australian projects are coming onstream, and the US Gulf of Mexico – which has the ambition of becoming one of the main LNG exporters worldwide – exported its first LNG earlier in 2016. Many of the traditional LNG offtake markets (such as Japan, Korea, Europe) show little growth potential in the immediate term, but other growing economies, which by virtue of their growth see a quick rise in energy needs, could employ FSRUs, a solution that is demonstrating it can provide a fast and cost-effective solution to serve these markets. Hardly a week goes by without a new FSRU opportunity being announced.
Will FSRUs continue to be cost-effective enablers to open new markets?
FSRUs offer multiple advantages. The units can be fairly standardised and built in specialised shipyards, which offers clear cost benefits. FSRUs generally are offered to the market on leasing terms, allowing projects to be developed with very limited cash up front for LNG importers. Several FSRU projects have demonstrated they can offer access to new market[s] very quickly; in many cases, new LNG import facilities have become operational in less than 12 months, and some have reached that point in even less than six months. FSRUs can provide significant flexibility, serving growing markets and seasonal markets and can even be deployed as a temporary solution while permanent land-based facilities are being constructed.
Major oil companies now also see FSRUs as market openers for LNG. When large LNG exporters fully support this business line along with the shipping and FSRU community, the sector will be strengthened significantly.
How do you see the shipping industry evolving and innovating in this new era of oversupply?
Currently, there is an oversupply of LNG ships, but there also is huge potential for new LNG coming onto the market in the medium-term. At present ship owners are looking at alternative markets for both unfixed old and new tonnage.
Recently, one of the most modern LNG carriers with the newest slow speed dual fuel engines was fixed for a long-term contract as an FSU. Many owners are looking at opportunities for converting vessels to FSUs or FSRUs. In the longer run, this also helps unlocking the new LNG markets.
What are you most looking forward to at the CWC World LNG Summit?
The CWC World LNG Summit attracts decision makers and policy makers and all the main stakeholders in the LNG supply chain. It is a prime event for getting a feel of where the markets are heading and provides valuable opportunities for networking.
Interview conducted by CWC Group. Edited by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/floating-lng/13062016/the-potential-of-fsrus-2591/