FLNGs Offer New Routes to Gas as US and Qatar Dominate 2030 Capacity

Floating LNG projects are offering new routes to gas resources, with seven projects sanctioned since 2023 adding 18 million tonnes per annum of capacity across six countries, according to Wood Mackenzie. The US and Qatar are expected to account for roughly half of global LNG production capacity by 2030. The consultancy says floating LNG can diversify supply concentration and relieve some of the potential market shortfall by bringing gas to market where onshore plants are too difficult or costly.

 

The Central Finding

 

A new analysis examines floating LNG. It offers new routes to gas. Seven projects have been sanctioned since 2023. These add significant capacity. They span six countries.

The analysis addresses market concentration. The US and Qatar will dominate. They will account for half of capacity. This is by 2030. Floating LNG could diversify this.

 

The Market Context

 

The market faces a potential shortfall. Gulf disruption could leave it short. This could reach 70 million tonnes annually. This would persist through 2035. Floating LNG could help relieve this.

Floating LNG offers a distinct route. It brings gas to market in difficult regions. Onshore plants may be too costly. It gives stranded resources a route. This diversifies supply sources.

 

The Capacity Contribution

 

Floating LNG is making a contribution. The seven projects add 18 million tonnes. This spans six countries. It gives owners an export route. Otherwise resources might stay stranded.

The contribution remains modest, however. It is less than 10 percent of new supply. A significant shortfall persists. All new South American and West African capacity uses floating systems. This shows its regional importance.

 

Read More: https://oceaneconomist.com/articles/iws-fleet-skywalker-csov-order

 

The Cost Competitiveness

 

The cost gap has narrowed. Floating LNG was traditionally more expensive. This gap has closed somewhat. One US project is competitive. Its cost per tonne rivals onshore projects.

Costs now cluster near benchmarks. Conversions and standard newbuilds compete. Utilisation averaged 88 percent recently. This exceeded the onshore average. Operating costs remain structurally higher.

 

The Redeployment Advantage

 

Floating systems offer mobility. Assets can be moved and redeployed. This is a distinct advantage. Redeployment costs far less than new units. This offers flexibility.

One vessel illustrates this. It completed a Cameroon contract. It is being repositioned for Argentina. It recovered its conversion cost earlier. The new contract offers substantial revenue.

 

The Future Potential

 

The sector has room to grow. Conversions have been central. These feature in development programmes. A lease-and-operate model exists. This lowers capital barriers for producers.

The sector faces a constraint. One company dominates the service model. Yet opportunities exist for entrants. There are substantial proposals pre-sanction. Much undeveloped gas could suit floating LNG.