Floating LNG Terminal Modularization Reduces Costs, Sees Stronger Global Demand

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Researched by Industrial Info Resources (Sugar Land, Texas)--Liquefied natural gas (LNG) is natural gas that has been cooled to a very low temperature until it condenses so that it can be more easily transported overseas. Receiving terminals for LNG tend to be costly and land-intensive affairs, involving huge berthing facilities to handle the immense tankers, as well as on-shore storage and regasification. The expense of such terminals would make it prohibitively expensive for developing nations to access the relatively clean-burning fuel. However, the advent of floating storage regasification units (FSRU) and their modularization by Japanese industrial firm Marubeni Corporation (TYO:8002) (Tokyo) have lowered the price barrier for importing LNG, thus increasing the number of potential customers and demand around the world.

According to Industrial Info's data, there are 16 countries that are actively developing FSRU facilities, centered mainly in the Mediterranean and South Asia. The projects range in cost from $100 million to $1.1 billion, with the majority falling below the $500 million mark. Of the 16, India is developing the most projects by value and by number, boasting five projects, while the United Arab Emirates (UAE) is developing a smaller FSRU at $100 million. Other countries developing FSRU facilities include Greece, Jordan, Lebanon, Ukraine, Bangladesh, Uruguay and Chile.

An engineering trend in U.S. onshore gas development also may give an indication of what the future holds for the FSRU industry. Skid-mounted and modular processing plants and booster stations have become more popular in recent years, as oil and gas production in North America has skyrocketed. This modularization allows for quick construction times and standardized equipment, also allowing for easier maintenance. Similarly, Marubeni has partnered with GDF Suez (EPA:GSZ) (Paris, France) to offer an offshore LNG terminal package that they intend to market to developing nations. The package boasts both a price tag and a construction timeline that is half that of traditional onshore facilities. A package with 120,000 metric tons of storage can be constructed in two years at a cost of $1 billion.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.