Global Floating Storage Regasification Unit (FSRU) Market Outlook to 2030

The Floating Storage and Regasification Unit (FSRU) market is poised for significant growth during the forecast period, driven by a combination of factors. The increasing demand for natural gas, particularly from European countries, is a key driver as nations seek cleaner and more sustainable energy solutions. This trend is further supported by the EU's plan to reduce its dependence on Russian fossil fuels.

FSRUs are also gaining traction due to their flexibility and reliability in providing LNG supply, making them ideal for meeting diverse energy needs. Their cost competitiveness, coupled with advancements in offshore gas production, enhances their appeal as an efficient and economical solution.

Additionally, the deployment of FSRUs in remote locations is becoming increasingly common, as they offer logistical and operational advantages in areas where traditional infrastructure may be challenging to develop.

Introduction

An FSRU is a special type of LNG tanker used to transfer LNG from one place to another through sea routes. An FSRU acts as an interface between LNG Carriers and the local gas supply infrastructure, thus playing a vital role in the LNG industry.

They are regarded as the fastest means to capitalize on low gas prices and their increased demand in various end-use sectors such as power generation, transportation, and industries. At the end of Q1 2024, a total of 49 FSRUs were there in the global LNG fleet.

It is anticipated that FSRUs will continue to be a popular option for storage and regasification during the forecast period. The conflict between Russia and Ukraine has further aroused interest in FSRUs across Europe.

Shipowners have reported receiving a significant number of inquiries regarding the prospect of deployment in order to alleviate the supply crunch and reduce dependence on Russian gas.

The global FSRU market consists of establishments involved in operating the floating storage regasification unit either through long-term contracts or through spot chartering.

Advantages of FSRUs

FSRUs play an important role in equipping new countries to quickly ramp up their regasification facilities because the time taken to construct an FSRU is just about half of that of an onshore terminal and offers flexibility with almost a plug-and-play kind of operation. Some of the benefits are listed below:

• Allow quick fuel switching
• Complement domestic production
• Require lower capital expenditures
• Flexible
• Faster
• Reaches remote areas easily
• Avoid delays due to land acquisition

Furthermore, an FSRU has the flexibility to serve multiple purposes, such as storage, regasification, and power generation, all at the same time or sometimes separately.

FSRU Market Outlook

The FSRU market growth rate is directly dependent on LNG market growth. Global LNG supply growth remained lackluster in the first half of 2024, increasing by a mere 2%, or around 6 billion cubic meters (bcm), year-on-year (YoY). This growth was entirely concentrated in the first quarter as LNG production rose by a robust 4.5% (or 6.5 bcm). By contrast, LNG output fell by 0.5%, or 0.5 bcm, YoY in the second quarter of 2024.

In the second quarter of 2024, the decline in LNG production was largely driven by a combination of feed gas supply issues and unexpected outages. YoY growth in LNG supply is expected to accelerate during the second half of 2024, with new liquefaction capacity coming online. The United States is set to provide the largest share of new export capacity this year as existing plants expand and new plants start operating.

At the end of Q1 2024, XX FSRU vessels were under construction, yet the number of newly built FSRUs is expected to be limited as all the major shipbuilders are preoccupied with tackling the surge in FSRU demand from Europe. However, repurposing an LNG carrier into an FSRU represents a cost-efficient means of enhancing the energy efficiency of aging vessels.

FSRU Market Dynamics

Cost Competitiveness of FSRUs is one of the major factors driving the market. An FSRU costs about USD 300 million to build, which is roughly half the investment required for an onshore facility.

Also, these FSRUs can be made operational within months if the port has supporting infrastructure, which is at least 6 times faster than an onshore facility of a similar scale, making them both cost-competitive and time-sensitive. This cost competitiveness enables both developing countries and established countries within the LNG market to rapidly expand their regasification facilities.

FSRU Market Trends

FSRU suppliers are seeing surging demand from European countries. In response to concerns about energy security amid the Russia Ukraine conflict, a number of European nations, particularly the Netherlands and Germany, are turning to floating storage regasification units (FSRUs).

They have been Europe’s primary solution to import additional LNG in the wake of the Russia-Ukraine war and the subsequent decline in Russian pipeline gas supplies.

Moreover, there is a significant rise in the number of portfolio players. They are entities (often integrated energy companies or traders) that manage a diverse portfolio of LNG supply sources, contracts, and destinations.

LNG is no longer restricted to big markets or big companies. In 2023, 20 exporting markets shipped 401.42 MT of LNG to 51 importing countries in which around 180 companies were involved in deliveries under term contracts.

Regional Analysis

Asia-Pacific is expected to be the leading region in the FSRU market during the forecast period, followed by Europe, North America, and the rest of the world.

Indonesia, Pakistan, China, Bangladesh, India, and Thailand are the major countries in Asia-Pacific with existing FSRU terminals along with a strong order book, while Italy, Turkey, Croatia, and Russia are a few emerging markets within Europe's FSRU market.

With a target to reduce emissions, LNG demand will rise in the power generation sector, especially in China and India, along with other countries in Southeast Asia, such as Thailand, the Philippines, Indonesia, and Malaysia.

Competitive Landscape

The global LNG carrier fleet has grown steadily in the last twenty years, with the rapid increase in liquefaction capacity being the key factor. About 90% of the LNG vessels are less than 20 years old, and the order book for these vessels remains strong during the forecast period.

The FSRU market is currently in an early stage of development, and there is not much competition within the market. However, major oil and gas companies and marine transportation companies with strong reputations and extensive resources and experience are expected to enter the FSRU global market, thus intensifying the competition.

FSRU Market Share

Excelerate Energy LP and Hoegh LNG Holdings Ltd., which own the FSRU, continue to maintain the largest fleets of active FSRUs. Some other market vendors are Golar LNG Ltd (New Fortress Energy Inc.), BW Group, Bumi Armada Berhad, Flex LNG, Gazprom, Eagle LNG, LNG Croatia, Exmar NV, Dynagas, Mitsui O.S.K. Lines (MOL), etc.

Recent Developments

• The European Commission, in December 2024 has approved, under EU State aid rules, an estimated EUR 4.06 billion German measure to support the operation of four storage and regassification units (FSRUs) for the import of Liquefied Natural Gas (LNG) by Deutsche Energy Terminal (DET).
• In December 2024, The state-owned Egyptian Natural Gas Holding Company (EGAS) signed an agreement with the U.S. energy infrastructure player New Fortress Energy (NFE) to lease a floating storage and regasification unit (FSRU).
• Mitsui O.S.K. Lines, Ltd. on 23rd of October announced an agreement with Singapore LNG Corporation Pte. Ltd., Singapore's state-owned LNG terminal operator, on a long-term time charter contract for one newbuilding FSRU.
• Excelerate Energy, Inc. and PetroVietnam Technical Services Corporation (PTSC) have signed a strategic partnership agreement, in September 2024, to jointly study Floating Storage Regasification Unit (FSRU) based technical solutions for LNG imports into Vietnam.
• In August 2024, Swan Energy Ltd said it plans to sell its stake in a floating LNG receipt terminal to Turkey's state-run Botas for USD 399 million. The company plans to sell assets of subsidiary Triumph Offshore Pvt Ltd to Botas Trading IC, according to a regulatory filing.
• In January 2024, Cosco Shipping Heavy Industry in Shanghai delivered ETYFA’s converted FSRU which will serve the first Cyprus LNG import terminal in Vasilikos.

Further Details Available in the Report

Blackridge Research's Global FSRU Market research report provides an FSRU market overview, comprehensive qualitative and quantitative analyses along with deep insight into the current and future of the market.

The market report analyses the annual trends of FSRU contracts, FSRU order book, the capacity of FSRU projects and investments into the sector; provides market size and forecast in terms of Capacity (MTPA); provides the list of upcoming LNG projects; details the market's drivers and restraints; discusses growth challenges at various levels; provides supply chain analysis; provides company profiles and competitive market analysis including FSRU market share; discusses various market-specific scenarios and much more.

Analysis of the Russia-Ukraineconflict's impact on the global FSRU market is an integral part of the report, which helps companies navigate a rapidly changing market landscape.

What Do We Cover in the Report?

Global FSRU Market Drivers & Restraints

The study covers all the major underlying forces that help the market develop and grow and the factors that constrain growth.

The report includes a meticulous analysis of each factor, explaining the relevant, qualitative information with supporting data.

Each factor's respective impact in the near, medium, and long term will be covered using Harvey balls for visual communication of qualitative information and will function as a guide for you to analyze the degree of impact.

Global FSRU Market Analysis

This report discusses an overview of the market, the latest updates, important commercial developments and structural trends, and government policies and regulations.

This section provides an assessment of the Russia-Ukraine conflict's impact on global floating production storage and offloading market demand.

Global FSRU Market Size and Demand Forecast

The report provides global FSRU market size and demand forecasts until 2030, including year-on-year (YoY) growth rates and CAGR.

Global FSRU Industry Analysis

The report examines the critical elements of the global FSRU industry supply chain, its structure, and the participants.

Using Porter's five forces framework, the report covers an assessment of the global FSRU industry's state of competition and profitability.

Global FSRU Market Segmentation & Forecast

The report dissects the Global Floating Storage Regasification Unit (FSRU) Market into various segments based on construction type (new build ship, converted ship/hull).

Further, market size and demand forecasts will be presented, along with various drivers and barriers for individual market segments.

Effective market segmentation enables you to identify emerging trends and opportunities for long-term growth. Contact us for bespoke market segmentation to better align the research report with your requirements.

Regional Market Analysis

The report covers detailed profiles of major countries across the world. Each country's analysis covers the current market scenario, market drivers, government policies & regulations, and market outlook.

In addition, global market size, demand forecast, and growth rates will be provided for all regions.

The global FSRU market report is segmented based on geography into:

North America: United States, Canada, Mexico, and the Rest of North America

Europe: Spain, France, the United Kingdom (UK), Italy, Russia, and the Rest of Europe

Asia Pacific (APAC): China, India, Japan, South Korea, Australia, Indonesia, and the Rest of APAC;

Rest of the World: South America, Middle East, and Africa.

Key Company Profiles

This report presents detailed profiles of major market players in the global FSRU industry. Some of the major companies covered are Excelerate Energy, HÖEgh Lng As, BW Group, etc. Generally, each company profile includes an overview of the company, relevant products and services, a financial overview, and recent developments.

Competitive Landscape

The report provides a comprehensive list of notable companies in the global market, including mergers and acquisitions (M&As), joint ventures (JVs), partnerships, collaborations, and other business agreements.

The study also discusses the strategies adopted by leading players in the industry.

Executive Summary

The executive summary will be jam-packed with charts, infographics, and forecasts. This chapter summarizes the findings of the report crisply and clearly.

The report begins with an executive summary chapter and ends with conclusions and recommendations.

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