Strong global outlook drives FSRU demand

The global outlook for LNG demand remains robust, with projections indicating strong growth well into 2050.

Lansdowne Moritz managing consultant Gary Regan shared this perspective during the LNG Shipping & Terminals Conference. Highlighting the role of floating storage and regasification units (FSRUs), Mr Regan outlined how emerging markets are poised to drive demand for these versatile assets.

“From a macro perspective, LNG demand globally is very strong, and we foresee a significant role for new FSRU projects in both existing and emerging markets,” he explained.

Over the past decade, the market has seen three FSRU projects launched annually. Mr Regan expects this trend to continue through 2030, with an estimated 40 credible projects currently in the pipeline.

“Beyond 2030, the potential is enormous, particularly in markets such as Indonesia, Thailand, Malaysia and Bangladesh,” he added.

Meeting this growing demand will require a mix of newbuild FSRUs and conversions of existing LNG carriers.

“At present, the prompt market has only one or two FSRUs available for immediate deployment,” noted Mr Regan.

He stressed the need for continued investment, pointing to the viability of converting steam turbine and dual-fuel diesel-electric vessels for FSRU use.

“These conversions, particularly of larger vessels, offer a compelling economic case compared with newbuilds,” he said, though he acknowledged that high-capital projects backed by well-funded governments may still opt for newbuilds.

Mr Regan also touched on the broader LNG market, discussing trends in LNG bunkering and shipping transactions. He noted a surge in infrastructure investment for LNG bunker vessels, with an estimated US$3Bn needed by 2030.

The year has also seen notable transactions in LNG shipping, including BlackRock’s sale of its GasLog stake and Morgan Stanley Infrastructure Partners divesting its share in the Höegh FSRU business.

With a strong foundation of demand and evolving market dynamics, the outlook for LNG infrastructure remains promising. However, the path forward will depend on balancing investment strategies to address varying market needs.