WATCH: McDermott and BW Offshore lift the curtain on floating blue ammonia FPSO model

February 12, 2026, by Melisa Cavcic

U.S. offshore engineering and construction player McDermott and Norway’s BW Offshore have unveiled a concept for a blue ammonia floating production, storage, and offloading (FPSO) unit that blends offshore production, carbon capture, and direct export, spotlighting the way in which surplus natural gas could be converted into a lower-carbon fuel and brought to market with reduced infrastructure and complexity to support the energy transition journey.

While providing a first look at its floating blue ammonia FPSO concept, developed in collaboration with McDermott, BW Offshore explains that the solution builds on its experience in floating production and operations, and forms part of the firm’s New Ventures portfolio envisioned to lend a helping hand in the energy transition momentum.

The Norwegian firm highlighted: “Demand for low-carbon fuels is increasing across multiple sectors, particularly in hard-to-abate industries where electrification alone is insufficient. At the same time, significant volumes of natural gas associated with offshore oil and gas production remain under-utilised. In many cases, limited export infrastructure or commercial constraints make it difficult to bring these resources to market.

“Blue ammonia offers a potential pathway to address this challenge by converting natural gas into a transportable, lower-carbon fuel that can support a range of industrial and energy applications. The International Energy Agency forecasts that use of low-carbon ammonia as fuel for power generation and maritime transport must increase significantly to achieve emissions reduction targets in these sectors.”

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The company elaborates that the floating blue ammonia FPSO is designed as an integrated offshore production and export unit, located close to suitable gas sources and CO2 storage sites. Gas, which is supplied from nearby offshore facilities via subsea flowline and processed onboard, is converted into hydrogen and subsequently to ammonia using a low-carbon process.

This concept is for a gas intake capacity of up to 3 million cubic metres per day, producing more than one million tonnes of ammonia per year. As carbon capture is incorporated into the process, up to 99% of the CO2 generated during production is captured and compressed for export to geological sequestration or other approved use.

With an estimated carbon intensity of around 0.5 tonnes of CO2 per tonne of ammonia, the concept is seen as being intended to align with prevailing international criteria for low-carbon hydrogen derivatives. BW Offshore outlines that options are available for further reduction of emissions from on-board power generation systems, lowering carbon intensity to almost zero to meet future market needs.

The company underlined: “By placing production offshore, the floating solution avoids many of the constraints associated with large onshore ammonia facilities, including land availability, permitting complexity and onshore operational exposure. The FPSO-based design also enables greater flexibility in location and has the potential for faster deployment compared to onshore alternatives.

“Ammonia is liquefied and stored in refrigerated tanks within the FPSO hull and offloaded directly to gas carriers. This removes the need for pipeline, terminal or port infrastructure, allowing for direct export to international markets with simplified logistics.”

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As BW Offshore and McDermott aim to offer a technically robust and commercially viable solution that can be delivered at scale, the floating blue ammonia FPSO could be structured with capital-efficient leasing models, providing flexibility for operators seeking to monetise surplus gas while managing upfront investment and long-term exposure.

“By enabling the conversion of surplus natural gas into a lower-carbon fuel, floating blue ammonia has the potential to unlock new value streams, support energy security and contribute to a more diversified energy mix,” emphasized the Norwegian firm.

BW Offshore has won multiple new assignments, as illustrated by a deal with Equinor for an FPSO destined for an oil project off the coast of Newfoundland and Labrador. McDermott is also securing new deals, as demonstrated by its recent major offshore decommissioning project with QatarEnergy.