INTERVIEW: FLNG and FSRUs are key to meeting gas demand growth

As natural gas demand continues to rise and countries increasingly prioritise energy security, the FLNG and FSRU sectors are well positioned to grow, taking advantage of the flexibility, speed of construction, and leasing options they provide, David Boggs, managing director of Energy Maritime Associates, told NewsBase.

Q: Tell us a little bit about your company and what services you offer players in the LNG sector?

A: Energy Maritime Associates (EMA), founded in 2010, is a leading provider of market intelligence and consultancy for the floating production sector. Floating production is our sole focus, which for the LNG sector includes import and export (FSRU and  FLNG) facilities, as well as storage facilities (LNG FSO).

We cover the complete lifecycle from discovery to concept selection to bidding to construction to operation and decommissioning. Our extensive database includes:

• Over 150 potential floating production projects
• More than 50 units on order
• 20+ units currently available
• Over 450 units in operation

Our quarterly floating production reports are complemented by an online database. For clients with specific requirements, we offer customised reports tailored to their needs.

Q: We have seen significant growth in the development of floating LNG (FLNG) terminals and floating storage and regasification units (FSRUs) in the past decade. What in your opinion are the biggest contributors to this growth and how big a role do you think FLNGs and FSRUs will play in the coming decades?

A: There have been several factors that have contributed to the growth of FLNG and FSRUs.

Energy Security: The Russian invasion of Ukraine has been a significant catalyst, with the number of FSRUs increasing from 36 to 47 between 2022 and 2023. Energy security has become a top priority.

Source: EMA Floating Outlook Report (2025-2029)

Flexibility and Leasing Options: The flexibility to be used in multiple locations and the option to lease these facilities provide a more attractive commercial model for some developments. They offer a faster solution than land-based facilities and can be used as an interim solution.

With global natural gas demand projected to grow at an annual rate of 1.5% to 2% over the next 25 years, FLNGs and FSRUs will be essential in meeting this demand, especially in regions where pipeline delivery is impractical.

Over the next five years, we forecast 19-32 FSRU awards and 4-11 FLNG awards. FSRU growth will be fulfilled by a mix of newbuilt units, converted LNG carriers, and redeployments of existing units after completion of their current contracts. For FLNGs, capacities will range from 1-4mn tonnes per year (tpy), with most units focused on liquefaction only, while a few more complex units will handle both processing and liquefaction.

Source: EMA Floating Outlook Report (2025-2029)

Q: Geographically, which regions do you think will benefit most in the coming years with greater use of FLNG and FSRU solutions?

A: Interestingly, the regions that will benefit the most from FLNG and FRSU solutions are mostly the same. There are large opportunities for both LNG import and export in Africa and South America. FLNGs can be used to export gas from shore, as being planned for Argentina. In addition, there are numerous offshore oil fields where gas is just being reinjected and potentially could be monetized via a floating facility.

For FSRUs one other region is South Asia, which has a huge need for more gas imports.

Q: What in your opinion is the biggest misconception associated with FLNGs and FSRUs that could be limiting greater usage? And what are some risk factors that could emerge on the horizon that cause challenges for the FLNG and FSRU sectors?

A: I think one of the biggest misconceptions that could be limiting its usage is the perceived danger associated with LNG. The permitting process for an FSRU or FLNG unit can be quite lengthy depending on the location and there is often local opposition to an LNG facility, based on safety concerns.

The biggest risk we see is the ability to finance these complex gas developments. It is becoming increasingly difficult (and expensive) to secure capital for hydrocarbon projects. Another threat is a push for more local content and land-based facilities rather than facilities constructed in foreign shipyards.

Q: Sustainability in the energy sector is of course top of mind now. How big of a role can FLNGs and FSRUs play in accelerating the energy transition?

A: Gas is key to the energy transition. With the rising demand for electricity driven by AI, data centres and electric vehicles, FLNGs can play a critical role in increasing gas supply. FSRUs can facilitate the distribution of gas to areas without gas pipelines.

The potential for growth in emerging markets is significant. Countries such as India, South Africa, Indonesia and the Philippines predominantly use coal to produce most of their electricity. Gas can serve as a much cleaner alternative to coal or liquid fuels, significantly reducing emissions and supporting their energy transition.

Q: Looking ahead for the FLNG and FSRU sectors, what are some improvements and advancements we could see in the years ahead that could give these sectors a major boost?

A: Two major areas for improvement that I see are reduction in costs and incentives to facilitate development of stranded gas.

There have been large strides made in the FPSO market to standardise and drive down the cost of production. I believe this will also happen in the FLNG market.

There are massive amounts of gas being reinjected in offshore fields, particularly in deepwater. These resources could be developed if the economics were made more attractive. This would require changing the commercial terms in countries such as Guyana, Brazil, Angola, Nigeria and others in Africa.

This article is from bne IntelliNews’ sister publication NewsBase that covers global energy issues. Sign up for a two-week trial here.