FSRU Concept Paper – Government of Pakistan

FSRUs, or Floating Storage and Regasification Units, were first implemented by Excelerate Energy in the US Gulf of Mexico in 2005, the US North East Coast in 2008, and at Teesside in the UK in 2007. These early implementations were driven by the potential for profit from winter gas price spikes in the US and the UK's liquidly traded gas markets. Since mid-2008, global demand for FSRUs has increased as countries with rapidly growing economies, unable to meet demand for gas, have turned to FSRUs as a means to import gas more quickly. FSRUs offer a faster alternative to conventional LNG terminals, which typically take a minimum of three years to build and bring online. In contrast, FSRUs can be operational in as little as one year, subject to the availability of the vessel. Brazil and Argentina were among the first countries to invest in FSRUs, with Argentina's YPF and Repsol purchasing two FSRUs in 2009 and 2011, and Brazil's Petrobras chartering two FSRUs from Golar on a long-term basis in 2009. Dubai and Kuwait followed shortly after, with Dubai's DUSUP chartering a long-term FSRU from Golar in 2010 and Kuwait's KNPC purchasing an FSRU from Excelerate in 2009. Since 2011, only one FSRU has come online, which was in Indonesia and supplied by Golar, although over eight orders have been placed. Stationary FSRUs and Ship-To-Ship (STS) LNG Transfer are two key concepts in FSRU implementation. Stationary FSRUs allow gas to be continuously delivered into the domestic market without the FSRU having to mobilize to lift the next cargo. This is achieved through the use of conventional LNG carriers that moor alongside the FSRU and transfer their cargo at sea or at the port using flexible cryogenic hoses. Flexible use of the FSRU is also possible with more than one FSRU, as employed by GdF Suez/Höegh at Neptune LNG in the US, where two SRVs go back and forth from Trinidad simultaneously. There are two main concepts for an FSRU, depending on whether it is located offshore or dockside. Offshore FSRUs are connected to a Single Point Mooring (SPM) mechanism, usually a Submerged Turret Loading (STL) subsea buoy, which is drawn into the hull of the ship and linked to a subsea pipeline through which regasified LNG is delivered to shore. Ship-to-ship transfer happens offshore. In some emergency situations, LNG is delivered through a single FSRU, which both transports the LNG and regasifies it into the natural gas network via the SBM, as seen in Israel. Dockside FSRUs are connected directly to a high-pressure gas-offloading arm near the loading arms, with gas being sent straight into the local network. Ship-to-ship transfer can either be alongside the FSRU or across the jetty. Fast track projects may use only a single FSRU, which both transports and regasifies the product into the local network, as seen in Teesport, UK. Deciding between offshore or dockside LNG transfer/unloading is largely dependent on having access to a deep water port/jetty that is also close to demand centers. Congested ports may also be a reason to have the FSRU located offshore. The potential downside of offshore FSRUs includes a potentially longer implementation process and higher associated costs. There is also an option to go for an FSU with a separate regasification unit, which can be either platform or shore-based. This solution has several benefits, including the ability to bring the FSU online faster than an FSRU and the ease of finding an alternative FSU when dry docking is required for maintenance. Some of the key benefits of a FSU + R solution include the ability to charter a FSU at any time and easily change it for another FSU if required, the ability to source a regas plant separately as a platform, barge configuration, or onshore, and the shorter build, supply, and tender process for a FSU and regas unit compared to an FSRU. Golar's business model is based on converting existing LNG carriers into FSRUs, whereas Excelerate and Höegh have ordered new builds. However, Golar also now has four new builds on order. Other providers of FSRUs include Norwegian company BW Gas, which has just ordered its first FSRU from Samsung Heavy Industries. There are currently ten FSRUs on order and a few more in a late planning stage. Of the ones on order, Excelerate is supplying one to Puerto Rico in 2015, Höegh has four