Douglas-Westwood looks at FLNG market

The floating LNG (FLNG) market is poised for increased investment and activity from 2014 to 2020, with Douglas-Westwood forecasting total expenditure of US$64.4 billion in its new market report. Two-thirds of this spend is attributed to liquefaction infrastructure, with the remainder from import and regasification facilities.

Report author, Amanda Tay, commented, “The previous seven-year period saw minimal investment in floating liquefaction infrastructure, but now with the introduction of floating LNG vessels, global FLNG Capex is expected to increase significantly over the next seven years. Year-on-year growth over this period is forecast to average 64% per annum and Douglas-Westwood expect the increase to be more pronounced after the successful start-up and operation of the pioneer FLNG vessels, such as Shell’s Prelude FLNG and Petronas’ PFLNG 1.” [PFLNG 1 design pictured at right, courtesy Petronas]

Douglas-Westwood anticipate that more floating regasification units are to be sanctioned, particularly in Asia and Latin America. In North America, however, the discovery of large supplies of shale gas has resulted in the shut-down of many of its operational terminals and the cancellation of upcoming import facilities. This development should see the reversal of North America’s traditional status as a net gas importer to that of an exporter.

Murray Dormer, report editor, concludes, “When compared to its onshore alternative, FLNG offers higher security, a cheaper alternative, shorter lead time and the ability to monetize stranded gas fields. While there are inherent risks, FLNG is undoubtedly a prospective market that, in the long-run, is poised to drive many future gas developments.”

The World FLNG Market Forecast 2014-2020 includes comprehensive examination, analysis and a 14-year view of FLNG expenditure, with historic data covering the period 2007-2013 and forecast data for 2014-2020.

UK-based Douglas-Westwood carries out advisory work, strategy development, business research and analysis for the international energy industries.