Ship of Fuels - As Global LNG Market Grows And Evolves, Vessel Usage Follows Suit

The number of floating storage and regasification units in operation has nearly doubled in the last few years, but that’s hardly a shock given the growth in the global LNG market. What might be a surprise is how a number of these specialty vessels are being utilized and what it could mean for the shipowners and the wider LNG market. In today’s RBN blog, we look at specific projects to gauge the progress made in the FSRU space, the recent slowdown in orders, some of the challenges the sector faces, and the trends emerging for new and converted FSRUs.

Floating storage and regasification units (FSRUs) are LNG tankers fitted with special equipment that enables them to receive, store, and regasify (or vaporize) LNG.

We’ve blogged about FSRUs on several occasions, including a market outlook published a few years ago in Take Me to the River. At the time, there were about two dozen FSRUs with plenty of new projects under discussion, and we projected that there would be more than 40, possibly even 50, such units by 2020. How well have these expectations been met? There will be 44 FSRUs in the world fleet by the end of 2021, pretty much in line with our earlier expectations.

Of the vessels due for delivery in 2021, four will be newbuilds and three are conversions of existing LNG carriers (LNGCs). Notably, Chinese shipbuilder Hudong Zhongwha has made its first vessel delivery in the form of the newbuild Transgas Power for Greek owner Dynagas, with a second vessel, Transgas Force, due for delivery in 2022.

But newbuild orders have slowed lately and Japan’s Mitsui OSK Lines (MOL) has switched an FSRU order with South Korea’s DSME to a conventional LNGC. Also, Maran Gas opted to bareboat charter — a lease that does not include the crew — its newbuild FSRU vessel to Excelerate for five years, which will take up station in Pakistan as the Excelerate Sequoia.

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