FSRU projects are under development on six continents and while some regas vessel facilities have come full circle and are shutting down, new schemes far outweigh the closures
The latest floating storage and regasification unit (FSRU) project to come onstream is that for Petrobangla off Moheshkhali Island. When the 138,000 m3, 2005-built Excellence began pumping its regasified cargo ashore via a subsea line in August 2018, Bangladesh became the world’s 42nd LNG import nation.
As a result of FSRU projects, 13 countries have joined the LNG importers club, while another three nations have added FSRU-based terminals to their existing complement of shore-based facilities. Looking to the future, four countries are moving ahead with plans to implement their first FSRU scheme, while a further 12 are evaluating proposals prior to a final investment decision.
FSRUs enable gas buyers to commence LNG imports much more quickly and at lower cost than is possible with shore terminals. The flexibility inherent in such vessels, most notably the ease of reassigning them to a new project, enables buyers to import LNG to cover a variety of situations.
For instance, a country’s traditional reliance on hydropower may be compromised by a drought, necessitating gas imports to fill the gap, or it may be necessary to turn to short-term purchases until domestic demand has grown enough to warrant construction of a large shore terminal.
"FSRUs enable gas buyers to commence LNG imports much more quickly and at lower cost than is possible with shore terminals"
Elsewhere, FSRU imports may suit an energy company with limited supply requirements, or one that is anxious to switch, for environmental reasons, from burning coal or oil fuel. Another possible FSRU scenario is the Egypt example, where regas vessels were temporarily used until the development of domestic energy resources reached a stage where there was no longer a need for further imports.
Growth trend hiccup
There are now 29 FSRUs in service and 12 on order. Just short of 35M tonnes of LNG was processed by FSRUs in 2017. Although the volume of LNG handled by FSRUs increased by about 8% compared to the previous year, the FSRU share of the global LNG import market fell slightly in 2017, to just under 12%.
This was the first time that the FSRU share of the LNG market had stopped growing since regas vessel projects were initiated in 2008. The percentage decline was due to the jump in the volume of LNG handled by new and existing shore terminals.
While the FSRU sector is set for continued growth over the longer term, there have been setbacks along the way. Schemes planned for Chile, Ghana, Ivory Coast, Croatia and Puerto Rico have been delayed, while Abu Dhabi states that it no longer requires the FSRU previously moored in Ruwais.
Some FSRU terminals have yet to be utilised to the extent originally envisaged, while others, most notably those in Brazil, Argentina and Egypt, have been handling greatly reduced throughputs in recent years. Egypt’s two FSRUs were extremely busy for a couple of years but new domestic gas finds are set to bring an end to LNG imports and a rebound in export shipments by the country’s two idled liquefaction plants.
Even the new Bangladesh project, which utilises a submerged turret loading (STL) buoy for the discharge of regasified cargo, has not been without startup problems. Excellence had arrived on station with a cargo for regasification two months earlier, but was unable to commence operations due to a combination of factors, including rough weather, pipeline construction delays and technical issues.
Readying new players
Yet for each FSRU setback there are two new regas vessel projects being tabled. And for every existing FSRU-based terminal that appears to have put its best days behind it, there is a new, virtually unheralded scheme that has been established by its principals in record time and commences regasification work seemingly out of the blue.
Of course, the big safety valve for new, purpose-built FSRUs is that they can be utilised as conventional LNG carriers in global LNG trading until specific work as a regas vessel has been lined up.
Turkey welcomes the 263,000 m3 MOL FSRU Challenger, the world’s largest FSRU, in November 2017
Two FSRUs are currently under construction at Hyundai Heavy Industries for deployment in Turkey. One of the newbuilds will free up MOL FSRU Challenger, at 263,000 m3 the world’s largest FSRU and currently employed in Turkey at Dörtyol near Iskenderun. The 2017-built Mitsui OSK Lines (MOL) vessel has already been lined up for its next role, as Hong Kong’s first FSRU under charter to CLP Power, beginning in late 2020.
Other FSRUs currently on order are earmarked for new projects in Brazil, Pakistan, India and Russia. In addition, both Maran Gas and Dynagas have two FSRUs under construction which they contracted speculatively, while BW LNG and Höegh each has one such unfixed vessel on order.
There is no shortage of regas vessel schemes under development that could absorb these newbuildings and go on to spur further FSRU shipbuilding orders. In recent months separate FSRU-based import terminals have been proposed for the Australian states of New South Wales, Victoria and South Australia, while Lebanon is looking at the possibility of three FSRU terminals.
Despite the fact that new liquefaction plants in Queensland, Western Australia and Northern Territories are about to propel the country into the top spot as the world’s leading LNG exporter, Australia’s principal population centres in the southeast are not linked to these gas riches. FSRUs are deemed the optimum way to bring this clean-burning fuel to Australia’s gas-deficient states in a timely fashion.
Meanwhile, China National Offshore Oil Corp (CNOOC) has chartered Höegh LNG’s 170,000 m3 FSRU Hoegh Esperanza for three years. The charterer has the option of utilising the ship as both a conventional LNGC and an FSRU at its Tianjin terminal in northern China.
Hoegh Esperanza became available when the GNL Penco project in Chile, for which it had been earmarked under a 20-year contract, suffered delays. The use of Hoegh Esperanza at Tianjin makes available Total’s 145,000 m3 GDF Suez Cape Ann, the FSRU previously used at the terminal.
GDF Suez Cape Ann’s regas capabilities were quickly snapped up. H-Energy has chartered the vessel as India’s first floating LNG terminal, at the port of Jaigarh in Maharashtra state. The FSRU is scheduled to start receiving LNG in late 2018.
"The big safety valve for new, purpose-built FSRUs is that they can be utilised as conventional LNG carriers in global LNG trading until specific work as a regas vessel has been lined up"
India’s second FSRU-based import project will be developed by Swan Energy at Jafrabad in Gujarat state. The company has a 180,000 m3 FSRU under construction at Hyundai Heavy Industries in Korea for delivery in 2019. The regas vessel will operate in tandem with a floating storage unit (FSU) and MOL, which is participating in the scheme, is lining up one of its older LNGCs for the role.
Back in Brazil, while throughputs at the established FSRU-based terminals of Guanabara, Pecem and Bahia may have declined in recent years, the regas vessel concept is poised to enjoy a renaissance through two new gas-to-power projects, at the ports of Açu and Sergipe.
Golar Winter was only five years old when the Keppel yard completed its conversion for use as regasification vessel in Brazil
BW LNG was the lowest bidder in a tender to provide an FSRU for Prumo Logistics, a company which plans to use LNG to feed a new power plant it is building at Açu. Prumo will work with BP to develop the FSRU mooring facility. The target start date is 2023.
Sergipe will be online much sooner. Golar Power, a 50/50 joint venture between Golar LNG and Stonepeak Infrastructure, will charter the 170,000 m3 Golar FSRU Golar Nanook to Centrais Elétricas de Sergipe (CELSE) for 26 years for use in supplying a large new gas-fired power station.
Under construction at Samsung Heavy Industries, Golar Nanook is due for completion in September 2018. The vessel is expected at its Sergipe submerged soft yoke mooring site early in 2019 where commissioning work will be carried out. The power plant is set for an early 2020 start.
Ocean LNG, a 70/30 Qatar Petroleum/ExxonMobil venture, will supply the FSRU with LNG, with the delivery tanker transferring cargo in the side-by-side position. A full cargo will enable the FSRU to feed the power plant continuously for 17 days.
There is currently a resurgence of interest in the conversion of LNG carriers into FSRUs. Conversions offer an even quicker and cheaper route to project realisation than FSRU newbuildings.
The Alexandoupolis FSRU project in northern Greece is aiming for a final investment decision by the end of 2018. Bulgarian Energy Holding is poised to join the initiative and GasLog, which has acquired a 20% interest in the project from the scheme’s operator Gastrade, is set to convert one of its conventional LNGCs into an FSRU to serve as the project's import facility.
Another LNGC-to-FSRU conversion project now getting underway, on a speculative basis and with no definitive application in mind, stems from the recent decision by BW LNG to convert its 162,500 m3, 2009-built BW GDF Suez Paris into a floating regas vessel at the Keppel yard in Singapore.
Conventional thinking has it that older LNG carriers make the best FSRU conversion candidates. As ageing LNGCs do not command freight rates as high as those offered to newer vessels in conventional trading, a switchover to regasification duties offers a veteran a new lease of life, as well as a healthy and steady late-in-life revenue stream for the owner.
Yet BW GDF Suez Paris, a GTT NO 96 membrane tank ship built by Daewoo Shipbuilding & Marine Engineering (DSME), is not that old. Also, it is powered by a dual-fuel diesel-electric (DFDE) propulsion system, an arrangement that still commands relatively healthy freight rates for conventional LNGCs.
In fact, DFDE propulsion systems are favoured for FSRUs, even newbuilding vessels. The improved fuel consumption figures provided by the new generation of dual-fuel, two-stroke engines are not so critical for regas vessels, due to the predominantly stationary nature of their employment.
Because the DFDE propulsion system only began to make its mark in the LNGC fleet midway through the previous decade, ships so powered are relatively young. Thus, there should be no need to consider an extensive design evaluation of the ship structure and membrane tank containment system if considering such a vessel for an FSRU conversion. The new intended service life as a regas vessel should not exceed the 40 years’ fatigue life to which the cargo containment system has been designed.
Those membrane tank ships whose cargo containment system was provided with enhanced reinforcements at the newbuilding stage, to minimise the risk of sloshing damage, would be looked upon with special favour as an FSRU conversion candidate.
The converted FSRU’s power plant will also need to handle the excess boil-off gas (BOG) volumes generated during the ship-to-ship transfers of LNG from the delivery tanker. The possibility of these BOG volumes being over and above the ability of the vessel’s gas combustion unit (GCU) to cope with will need to be studied before proceeding with a conversion.
Solutions include a re-evaluation of the membrane tank containment system, to see if the tanks could be safely assigned a higher maximum vapour pressure rating, of up to 0.7 bar, and the provision of a means to oxidise any excess vapour still arising.
Keppel is expected to complete the transformation of BW GDF Suez Paris into an FSRU by the end of 2018. It will be provided with the capacity to regasify up to 5.6 mta of LNG.
FSRU conversions are also being considered by Total and Croatia LNG for their proposed LNG terminals at Vridi near Abidjan in Ivory Coast and at Krk Island’s Sepen Bay, respectively.
Both projects have suffered delays and it is believed that FSRU conversions provide the optimum solution when facing the challenge of raising the necessary finance. Golar is involved with the Total consortium developing the Ivory Coast scheme and would provide the FSRU.