Floating gas comes of age

Equipment constraints loom over the backlog

NOV  senior vice president for operators and geographical sales, Cobie Loper, offered a candid appraisal of supply chain pressures. Power generation and compression now carry lead times of three to five years, driven not only by FLNG and FPSO demand, but by competing global demand from data centres and other power-intensive sectors. Mr Loper observed that the more sophisticated operators have already responded by entering directly into long-term supply agreements with turbine manufacturers, citing Delfin LNG’s agreements with Siemens as an example.

Other equipment categories face stretched delivery windows. LNG and seawater pumps are running at 1.5 to 2.0 years, with MEG and gas seal systems, cranes and flexible pipe all in the 1.5-year range. For new entrants without established procurement relationships, these timelines represent a material scheduling risk.

Mr Loper’s broader argument was that equipment suppliers who will maintain and support floating assets for 30 years should be engaged during pre-FEED, not once the engineering has been frozen. Decisions made early about equipment selection and integration are effectively irreversible by the time detailed engineering commences. In a market where the lowest upfront bid may conceal significant long-term operational costs, the economics of early supplier engagement are increasingly well understood among major developers, if not universally adopted.

FSRU operations: lessons from the field

Vice president for FSRU terminal operations at Energos Infrastructure, Captain Devendra Kumar, brought a distinctly operational perspective. Energos, formed in 2022 following the acquisition of assets formerly held by Golar and New Fortress Energy, operates nine FSRUs, two floating storage units and two LNG carriers. The company sits among a small group of leading FSRU owners alongside Höegh LNG and Excelerate Energy.

Captain Kumar described the commissioning of four FSRUs across Egypt and Jordan over a four-month window last year as the company’s most demanding operational exercise to date. The vessels were redeployed units, two released from German projects, one completing a decade in Jordan and one finishing its tenure in Brazil. Commissioning timelines across the assignments ranged from four to eight weeks, where infrastructure compatibility was high, to longer periods where CNG send-out manifold modifications were required. Those modifications, involving high-pressure stainless steel and classification society approvals, introduced a minimum three to four-month procurement lead time that operators must account for early in project planning.

He distinguished between operations in warm-water environments, where open-loop regasification using ambient seawater suffices, and colder climates such as northern Europe, where closed or intermediate glycol loops require additional energy input and more complex operations. Europe currently hosts the largest concentration of FSRUs by region, a position established rapidly after Russia’s invasion of Ukraine drove more than 10 units into the continent.

The small market problem

A question from delegates highlighted a structural challenge the sector has not yet resolved: how to deliver gas economically to small island economies and archipelagic markets where throughput volumes cannot justify conventional FSRU infrastructure. Mr Boggs acknowledged that the economics remain difficult. Individual island markets are too small to receive conventional LNG parcel sizes, and the answer, where one exists, likely involves a hub-and-spoke distribution model: a primary import terminal serving as a break-bulk point, with gas then moved onwards by feeder vessel, containerised LNG or CNG. Indonesia has explored variants of this model. The Caribbean has discussed it for years without a scalable commercial solution emerging. Market observers suggest that until LNG bunkering infrastructure and small-scale distribution logistics mature further, fuel-switching in these markets will remain constrained.

Commercial structures and capital

On financing, Mr Kilkety outlined the two dominant commercial models: EPC ownership, where developers raise project or balance sheet finance and take title to the unit, and leasing, where EPC contractors such as Wison can support financing arrangements and developers reduce upfront capital exposure. The choice depends on a developer’s balance sheet capacity, risk appetite and strategic intent, and the leasing model has gained ground, particularly where shorter contract tenures or uncertainty over long-term field life make ownership less attractive.

The broader panel view on market risk for new entrants was sobering. Mr Boggs invoked a remark attributed to Bruno Chabas, former chief executive of SBM Offshore, that to become a millionaire in the FPSO business one must start as a billionaire. The FLNG market, still only 15 years old, retains much of that character. Capital requirements are large, execution complexity is high, and the cost of under-specification or poorly managed contractor relationships compounds over a 30-year asset life. Mr Loper summarised the view across the panel: the market is growing, execution discipline has improved materially over the past decade, and collaboration across the supply chain is replacing the more adversarial procurement practices of earlier years. For new entrants, understanding where to specialise and what risks to retain or pass through remains the defining strategic question.

The Floating Energy Forum takes place on 14 May 2026 at Norton Rose Fulbright’s offices, London.