Global FLNG Capex to total $37.6bn, as the second wave of liquefaction projects gets final investment decision
The sanctioning of ENI’s Coral South FLNG unit signalled the second wave of liquefaction vessels expected to be ordered over the forecast period. The start-up of pioneering projects, and the deployment of the first converted LNG carrier to FLNG unit, will serve as a proof-of-concept, supporting future investments. Given the strong fundamental drivers – increasing gas consumption due to economic growth, fuel switching, and energy security – the outlook for the import vessels will remain strong over the 2018-2023 period. Despite near-term concerns due to challenging market conditions, the incentive to use FLNG units to develop gas reserves in remote places remains compelling. However, a downside risk to the forecast remains, as operators continue to evaluate various alternative development options, including the use of existing onshore infrastructure, which may provide a more economically viable development option or concepts influenced by local political interventions.
Global Expenditure on FLNG Facilities by Region, 2012-2023
- Global Capex on FLNG facilities is set to grow at a 9% CAGR over the 2018-2023 period, with expenditure forecast to total $37.6bn.
- North America will account for the largest share of the market at 29%, with expenditure amounting to $11.1bn over the forecast.
- Liquefaction vessels are expected to account for 70% of global FLNG expenditure over the forecast, with import facilities representing the remaining 30% of the market.
- With 28 import vessels currently in operation, Westwood is expecting an additional 47 import vessels to be commissioned over the forecast period.
- Expenditure on import vessels will total $11.2bn over the forecast. This represents an increase of 68% compared to the 2012-2017 period.
The report appendix includes information on all identified prospects for both liquefaction and import/regasification projects from 2018 to 2023 by operator, location, proposed unit capacity, status category, and onstream year.