With orders set to reach $173 billion, ‘robust’ demand in store for FPSO, FLNG and other floating production units
The rise in energy security concerns has reinvigorated the zest for more hydrocarbons, thus, the global oil and gas industry is turning to floating production systems to develop new projects. Bearing this in mind, a new report predicts a further boost in demand, with projected orders reaching up to $173 billion for as many as 168 units within the next five years, according to Energy Maritime Associates (EMA), a provider of data, analysis, and advisory services, tracking floating energy production trends across the globe.
While EMA forecasts a “robust” 2024-2028 demand outlook for floating production systems, the specialist offshore energy advisory firm also notes that the market demand will be predominantly driven by floating production storage and offloading (FPSO), floating liquefied natural gas (FLNG) units, and production semi-submersibles. This surge in demand also comes with its own set of challenges, as supply chain pressures threaten to stifle growth.
EMA’s ‘Floating Production Outlook Report (2024-2028)’ offers an in-depth analysis and warns of potential supply chain bottlenecks. With shipyard slots for FPSO hulls and other integral orders nearly fully booked through to 2026, the specialist offshore energy advisory player is adamant that the industry could face significant project timing and cost implications as constructors scramble for alternative suppliers.
However, the report shines a light on strong project economics buoyed by high hydrocarbon prices, low project break-evens, and the comparatively low carbon footprint per barrel of these systems, despite supply chain challenges.
David Boggs, Managing Director of EMA, commented: “Our in-depth report does not just chart out the demand but provides a clear-eyed view of the potential hurdles ahead. It’s crafted to arm industry executives with actionable intelligence, balancing the excitement of a booming market with the realities of supply constraints.”
The report, spanning over 200 pages, delineates EMA’s market outlooks across regional landscapes and floating infrastructure segments, offering a granular look at the trends shaping the future of floating production for those at the helm of strategy in the energy sector aiming to navigate the complex market currents and align their capital allocation and contracting strategies with confidence.
This report comes after EMA’s merger with Archer Knight, which was undertaken to enable both players to redefine their position in the offshore energy market intelligence landscape while paving the way for an expanded employment plan with a projected creation of ten new jobs.