Floating LNG: lack of vessels could stymie a good option for Europe

US President Joe Biden’s promise to supply more liquefied natural gas to Europe would be welcomed in the dry capitals. But the short-term introduction of gas into Germany may be complicated due to a shortage of floating terminals to turn that LNG back into gas.

America can offer a virtual gas pipeline to Europe, using specialized LNG tankers. Its export capacity is quite full, but Biden still promised to find 15 billion cubic meters for its European allies. Some of it has been diverted from point-by-point cargo routes in Asia that are already offering record prices. Although it only replaces less than a tenth of Russia’s supplies, everything helps.

Germany, which does not yet have re-fleece terminals, wants to use Floating terminals To get LNG from the shore, turn the fuel into gas and transfer it to land networks. Floating storage units and fleece units (FSRU) can be set up in less than a year, if you can find them.

France also announced on Monday Plans for floating terminals. good party. Building a terminal for a rebuilt fleet can take four years, Rystad Energy notes, no matter what the nymphism.

Each FSRU has about a quarter of the capacity of larger terrestrial plants that put in perhaps 20 million tons (27 billion cubic meters) of LNG. But the time advantage makes renting these for probably $ 140,000 daily worthwhile for a few years.

Achieving these FSRUs is a different story. Only 33 of these vessels exist worldwide, according to VeselsValue, most of which have been built since 2014. Worse, with no new orders at the moment, supply will not improve any time soon.

This means that some shipyards in Asia, and the current owners of FSRU, can succeed in the next two years. Korean shipbuilders – Hyundai, Samsung and Daewoo – control the construction of FSRUs that cost up to $ 350 million to build from scratch for two-plus years.

Among the owners, BW Gas, Hoegh LNG and Norway’s New Fortress Energy control half of the fleet, almost all of which have already been leased. The U.S.-traded stocks of Hoegh LNG Partners and New Fortress Energy have risen recently. Another, Excelerate Energy, plans to hold an initial public offering.

Just finding new sources of natural gas for Europe seems difficult enough. But getting the molecules to where they are most needed may require much more than these floating LNG vessels.

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