Investments of $126 billion in floating production units for oil and LNG are expected by 2030

Nearly 120 floating production systems could be ordered in the next five years, according to Scottish consultancy Energy Maritime Associates (EMA).

Floating production systems (FPS) first emerged in the 1970s as an option for the production of hydrocarbons discovered at greater ocean depths, surpassing the viability of fixed platform installations.

An interim forecast in an EMA report predicts orders for 119 floating production systems over the next five years, with a cost of $126 billion, of which more than 70% of the projected investments will be directed toward 54 Floating Production, Storage, and Offloading (FPSO) units. An FPSO is used by the offshore oil and gas industry for the production and processing of hydrocarbons, as well as for oil storage.

Greek Involvement in Offshore Investments

Investment interest is strong due to significant offshore oil and gas exploration and extraction activity.

In this broader sector, the Greek focus has also turned to Shuttle Tankers. Shuttle tankers are a specialized type of tanker designed to load cargo from offshore facilities or from a larger ship that cannot reach its destination due to draft limitations.

Recently, Maria Angelicoussis made a major deal worth $2 billion with Altera Shuttle Tankers L.L.C. (AST) through Maistros Shiptrade Limited, a company associated with the Angelicoussis Group. The Group owns 18 of these ships, plus three under construction, totaling $390 million in cost.

However, the Tsakos Group is a pioneer and expert in the field, having invested in Shuttle Tankers 12 years ago. It currently operates four such vessels and, according to reports, has two more under construction.

Additionally, in the offshore support vessel sector, Yannis Dragnis has recently invested through a joint venture with significant financial partners, purchasing a portion of the fleet of the Singapore-listed company Atlantic Navigation, specifically 20 ships. This venture, MAG Offshore, is supported by EnTrust Global wing Maas Capital, the Goldenport Group of Yannis Dragnis, and Allianz Marine Services from the UAE.

As Dragnis commented, “The latest investment in the offshore sector reflects my belief that the energy transition will proceed at more realistic speeds and that the offshore oil and gas sector will continue to play a critical role in the future.”

Brazil Remains the Largest FPSO Market

According to EMA, Brazil will remain the largest FPSO market, with its share of the FPSO fleet being larger than that of Africa and the rest of South America combined.

“Newbuilds will be the norm in the future, although converted tankers and the reuse of existing FPSOs will play a role, particularly for smaller developments,” EMA said.

Floating LNG

Africa, Argentina, and the Mediterranean are expected to contribute $14.3 billion in floating production units being built or reused for floating LNG export projects.

Floating Storage and Regasification Units (FSRUs) will mostly be new builds, according to EMA, with a small number of conversions and relocations.

Another $6.3 billion is forecast for floating LNG import projects globally, with Europe and South America accounting for the dominant share of total capital investments exceeding $20 billion in FSRUs.

“This FSRU demand will be met by a combination of newbuilds, conversion of older LNG carriers, and repositioning existing units,” EMA stated.

Floating Offshore Platforms

EMA noted that semi-submersible platform designs will remain popular for deepwater explorations on both sides of the Gulf of Mexico and in China, due to recent cost savings related to the construction of such platforms.

“The cost for these platforms has decreased due to repeated orders for standardized designs, such as Shell’s Vito, Whale, and Sparta platforms,” EMA said.

According to EMA CEO David Boggs, “Despite the rising costs and geopolitical uncertainty, the fundamentals of the floating production sector remain strong with a large number of projects at the design stage. Offshore developments, especially in deepwater, will remain attractive investments as they offer low cost per barrel and low CO2 per barrel. While mature areas such as the UK’s North Sea are in decline, additional developments will continue in established areas such as the Gulf of Mexico, Brazil, and West Africa. Furthermore, developments in new frontier areas such as Suriname and Namibia will require additional units.”

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