Another week, another FSRU proposal

Floating storage and regasification units (FSRUs) are perhaps the one bright spot in an LNG shipping landscape beset by overcapacity on the water, by sluggish progress towards final investment decisions on new export projects and by falling gas prices.

With cheaper gas prompting more countries to join the LNG-importers’ club, there is now unprecedented interest in FSRUs – as these can offer the quickest, most cost-effective way to do just that.

Studies into FSRU-based projects are gathering momentum, at sites as far afield as the Dominican Republic to South Africa and from Chile to Dakar and the Philippines.

So far, FSRUs remain a tiny niche within the LNG shipping sector – our research lists 33 FSRUs and floating storage units (FSUs) on order and on the water – but growth in this segment is likely to outpace that of both floating LNG production vessels and conventional LNG carriers, with nearly 50 new projects mooted across the world.

As always, with research that has a cut-off point, days after we closed our spreadsheet news emerged of yet another proposed FSRU project. Singapore’s Energy Market Authority (EMA) has invited tenders from consultants to carry out feasibility studies “on whether there are suitable sites that can be used to deploy floating LNG solutions”.

Reports from Singapore suggest that the EMA has chosen two sites at which to berth FSRUs, either as permanent infrastructure or to be activated at short notice. According to a spokeswoman for the EMA, the country’s current 10 million tonne a year (mta) demand could increase by nearly 7 mta by 2025.

Existing import terminal Singapore LNG plans to nearly double its Jurong Island capacity from 6 mta to 11 mta, seeking to shore up domestic energy security and reduce its dependence on piped gas from Indonesia and Malaysia.

Plans have been mooted to build a second terminal in Singapore. Singapore is also famously positioning itself to become an LNG trading and transhipment hub for Asia – but at present it lacks the volumes of rival candidates South Korea, Japan and even China.

If Singapore does go ahead, deploying FSRUs to support its LNG-trading ambitions, this will be one of the most intriguing floating import projects to watch.