The global LNG market is growing rapidly, with both steep expansion of liquefaction capacity and rapidly growing demand for LNG. Regasification services enabling this trade are therefore also in high demand. Within the regas sector, floating solutions are gaining market share given their flexibility and efficiency in terms of time and cost.
The volumes of LNG traded globally are set to reach some 320 million tonnes this year, which compares to less than 250 million tonnes as late as in 2016. With a wide range of new export projects coming online over the next few years and yet more projects expected to reach a financial investment decision (FID) soon, the world’s LNG supply capacity may well approach 500 million annual tonnes in the mid-2020s.
On the demand side, these developments are mirrored by increased use of natural gas, both in economies with a long tradition for using this clean-burning fuel, as well as in places where more polluting sources of energy, such as coal and oil, have dominated the supply mix.
Some of the players now increasing their gas imports are motivated by the need to compensate for declining pipeline supplies either from home or abroad, while others currently do not have access to such supplies at all. In both cases, the growing global LNG market has proven to be a competitive, reliable and flexible source of supply – and a growing number of gas buyers acknowledge this. Over the last decade, the number of countries importing LNG has more than doubled, from 17 to 39.
Over the same period, players either establishing themselves as LNG importers or expanding their LNG imports have come to realise that FSRUs are more efficient in terms time and cost, in addition to being more flexible. Over the last decade, the number of FSRUs in operation has jumped from 2 to 24. FSRUs have been successfully installed in several countries that are newcomers to the LNG market, providing these new markets with access to the global gas market much faster and at a lower cost than what is possible when building land terminals – from Colombia to Lithuania, Egypt, Pakistan, Bangladesh and others.
As an early mover with extensive experience and a modern and efficient market-leading fleet, Höegh LNG demonstrates on a daily basis that an FSRU is proven technology. Our FSRUs are carefully designed to deliver 100% availability and our personnel is highly skilled, as is shown by zero lost time incidents over the last 12 months.
As an FSRU provider, we help customers cover their differing needs. In some cases, our services enable LNG supplies as a backup for renewables with seasonal fluctuations or as additional energy in seasons with high demand. In other places, we facilitate diversification of supply, and in yet other locations there is simply a strong need for more energy to secure economic growth and better living standards. Additionally, we see that distribution of LNG in smaller volumes either by sea or onshore, including for purposes such as marine fuel, is taking off. Whatever the need, FSRUs are the key to efficiently tap into the global gas market.
Looking ahead, we firmly believe in natural gas as a clean and cost-efficient fuel, to the detriment of coal and oil. The global gas market is indeed growing fast, the LNG segment growing even faster and floating solutions are the way forward.
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Image courtesy of Höegh LNG
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