One of my last article about Global LNG Industry which was used as PR material for FSRU Asia Summit 2016, http://www.fsrusummit.com/ The original article can be read in this link https://energyroutes.eu/2016/05/08/global-lng-market-trends-and-future-outlook/

1. RISE OF THE FSRUAND THE LNG MARKET OUTLOOK
www.fsrusummit.com

2. www.fsrusummit.com2
RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
 PART 1
The Global LNG Market:
Trends and Future Outlook
 PART 2
Rise of the FSRU
 PART 3
Upcoming FSRU Orders Map
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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
THE GLOBAL LNG MARKET
By Athanasios Pitatzis
Athanasios Pitatzis is an Industrial/Petroleum Engineer and Member of the Greek
Energy Forum. He specializes in the development of oil gas markets in Southeast
Europe and the Mediterranean. He is also the owner of the website Energy Routes
where he publishes all his articles covering the global oil and gas industry. The
opinions expressed in the article are personal and do not reflect the views of the
entire forum or the company that employs the author. Follow Greek Energy Forum on
Twitter at @GrEnergyForum and Athanasios at @thanospitatzis.
Low LNG prices over the last two years have created a challenging business environment for new projects.
According to the recent KPMG report “Uncharted Waters: LNG Demand in a Transforming Industry”, global
LNG demand will face many uncertainties in the future, including:
Editors Note: This is an edited version of the article. The original can be viewed here.
SHORT TERM MEDIUM TERM LONG TERM
§ Japanese nuclear restarts
§ Ukraine crisis
§ LNG storage
§ Trading house vertical integration
§ New buyer alliances (JERA)
§ Japanese deregulation
§ Chinese economic growth
§ New Russian pipelines
§ New importers
§ Asian urbanization
§ LNG in transport
§ Renewable energy
§ Climate policy
TRENDS AND FUTURE OUTLOOK

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
$4.65
United
Kingdom
$4.68
Cove Point
$5.19
Canaport
$5.69
Altamira
$2.13
Lake Charles
$5.23
Spain
$4.38
Belgium
$5.69
Rio De
Janeiro
$5.73
Bahia Blanca
$5.75
Korea
$5.70
India
$5.60
China
$5.75
Japan
WORLD LNG ESTIMATED JANUARY 2013 LANDED PRICES
GLOBAL LNG PRODUCTION
WORLD LNG ESTIMATED JANUARY 2016 LANDED PRICES
Source: World LNG prices January 2016, USA Federal Energy Regulatory Commission (FERC)
63%
63%
56%
53%
This is largely due to the huge increase in the
production of LNG, far greater than current market
demand. According to Gas Strategies, overall
global LNG production will reach 270 mt in 2016,
up by 22 mt (8.9%) compared with 2015.
2015 2016
270 mt
$10.47
United Kingdom
$4.68
Cove Point
$3.86
Altamira
$3.29
Lake Charles
$11.41
Spain
$10.12
Belgium
$12.10
Rio De Janeiro
$13.20
Bahia
Blanca
$15.38
Korea
$13.00
India
$15.00
China
$15.38
Japan
Source: World LNG prices January 2013, USA Federal Energy Regulatory Commission (FERC)
At present, the LNG market is transforming into a global united commodity market with increasing liquidity and competition. The effects of this change can be
seen by the decline in LNG prices, more than 50 per cent in some cases, in a period of only three years between 2013–2016:
8.9%
INCREASE
248 mt

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
Leading up to 2020, the International Energy Agency predicts that inter-regional gas trade will expand by 40% between 2014 –2020, surpassing 780 billion cubic metres. LNG will
account for 65% of the increase. Initially this increase will mainly be generated by Europe, China, and non-OECD countries in Asia:
500
400
300
200
100
LNG LNGPipeline Pipeline
 OECD Asia Oceania
 OECD Europe
 Non-OECD Asia
 China
 Latin America
 OECD Americas
 Middle East
 Africa
 FSU/non-OECD Europe
2014 2020
GROWTH OF GAS IMPORTS, BY REGION, 2014 TO 2020
Source:
International Energy
Agency (IEA)
If we zoom into East Asia, we can also see that LNG imports declined by
3.9% between 2014– 2015. Despite the huge drop in the price of LNG,
the main factors for this decline according to Cedigaz (The International
Association for Natural Gas), were lower than expected economic growth
in that region, gas-fuel competitiveness and weather related factors.
Whilst the current low LNG price and near-term uncertainties will make
the next five years challenging, beyond that the future is looking very
bright according to predictions made by Exxon Mobil in their report “The
Outlook for Energy: A View to 2040”:
§ Global demand for natural gas will increase by 50% from 2014 to 2040
§ Natural gas is projected to cover the 40% of the future global energy
demand until 2040
§ LNG exports expected to triple globally by 2040 China Japan
80
60
40
20
South Korea Taiwan
LNG GROSS IMPORTS IN EASTERN ASIAS
 2014  2015

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
171
Beyond 2020, the growth in LNG demand will shift to new emerging markets:
1 Egypt (Zohr) and Argentina (Unconventional
gas), both of which currently import LNG but are
not forecast to do so in 2030 due to recovering
domestic production
billion cubic feet per day
Source: New LNG markets key to growth, Energy Insights
 Likely Emerging Markets
§ Bangladesh
§ Vietnam
§ Philippines
§ Cuba
§ Uruguay
§ Bahrain
§ Ghana
§ Morocco
§ South Africa
§ El Salvador
§ Indonesia
§ Singapore
§ Pakistan
§ Egypt
§ Jordan
§ UAE
§ Kuwait
§ Puerto Rico
§ Dominican
Republic
§ Argentina
§ Mexico
§ Chile
§ Thailand
§ Malaysia
§ Poland
 Recent Market Entrants
34
120
83
2015
2020
2025
2030
Source: Floating LNG Regasification is used to meet rising natural gas demand in smaller markets,
U.S. Energy Information Administration
Of this growth, most of the recent entrants will utilise floating LNG storage and regasification
unit (FSRU) solutions. This is particularly because they allow LNG to be imported quicker and
more cheaply than using a land based LNG import terminal, making them cost-effective for
smaller or seasonal markets. As a result, the future outlook for these vessels is promising:
0.8%
1.5%
2.8%
3.3%
4.5%
4.7%
5.3%
6.4%
8.0%
8.0%
100
120
80
60
40
20
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
 Floating regastification Floating regastification share
of total
 Onshore regastification
LNG DEMAND BY COUNTRY FOR RECENT AND LIKELY
MARKET ENTRANTS
TOTAL GLOBAL LNG REGASIFICATION CAPACITY

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
To support this growth, 8 LNG import terminals are expected to start up in 2016 with a total capacity of 31.1 mtpa. The two new importers, Ghana and Colombia will use FSRUs provided
by Golar LNG and Hoegh LNG respectively:
LNG RECEIVING TERMINALS SCHEDULED TO START-UP IN 2016
CHINA
§ Yuedong/Jieyang
§ Beihai
§ Dalian Expansion
§ Guangdong Dapeng
Expansion
§ Diefu
2.0 mtpa10.0 mtpa
3.0 mtpa
3.0 mtpa
3.0 mtpa
2.3 mtpa
4.0 mtpa
FRANCE
§ Dunkirk
3.8 mtpa
GHANA
§ Tema*
COLOMBIA
§ Cartagena*
Source: Gas Strategies
* Terminals using FRSU

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
15 LNG exports projects are targeted to reach FID during 2016. LNG commodity prices started 2016 at their lowest level since 2009 in Asia, and the lowest in over a decade in Europe and
North America. This low price will make it difficult for the projects targeting FID this year to proceed unless they significantly reduce their costs in order to be economically viable. As a result
of the current LNG glut and the gradual growth in demand, market conditions are predicted to remain until around 2022 when demand from new emerging markets picks up.
PROJECTS TARGETING FID IN 2016
Source: Gas Strategies
12.0 mtpa4.5 mtpa
2.1 mtpa4.5 mtpa
12.0 mtpa8.0 mtpa
0.6 mtpa6.0 mtpa
5.0 mtpa15.0 mtpa
2.5 mtpa
2.0 mtpa 2.5 mtpa
12.0 mtpa
3.8 mtpa
CANADAUSA
§ Pacific North West
§ Woodfibre
§ LNG Canada
§ Douglas Channel
LNG
§ Goldboro’ LNG
§ Sabine Pass Train 6
§ Corpus Christi Train 3
§ Magnolia Trains 1 to 4
§ Jordan Cove
§ Elba Island
§ Lake Charles
INDONESIA
§ Tangguh Train 3
EQUATORIAL GUINEA
§ Fortuna LNG
MOZAMBIQUE
§ Coral FLNG
§ Mozambique LNG

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
RISE OF THE FSRU AND
UPCOMING ORDERS
By David Boggs
David Boggs is the Managing Director and founder of Energy Maritime Associates, which publishes market
leading reports on the floating production industry, including developments requiring FPSOs, FLNGs, FSRUs,
Semis, Spars, TLPs, MOPUs, and FSOs. David has 15 years experience in the Offshore Oil Gas Industry
including extensive involvement in numerous FSO and FPSO projects.
FSRU contracts have been the bright light in the floating production sector. The first dedicated FSRUs began operation in 2008 and the
fleet has grown quickly in size. By 2011 there were seven units installed and this doubled to fourteen units by 2014. Energy Maritime
Associates forecasts the fleet could grow by an additional 4–5 units per year through to at least 2020.
In addition, there has also been use of an LNG FSO together with onshore or barge based regas facilities. There are currently three LNG
FSOs in operation with two more on order.
NEWBUILT VS CONVERSION
Five of the first six FSRUs were based on converted LNG tankers. However, since 2010, all FSRU orders have been purpose-built units.
Five of these units were initially built as LNG regas vessels and are now used as permanent FSRUs.
Recently there has been renewed focus on conversions. As the LNG shipping market has deteriorated, older LNG carriers are becoming
harder to employ and are therefore seeking alternate use as FSRUs and LNG FSOs. Currently there is an oversupply of LNG carriers,
with at least ten 1970s and 1980s-built vessels laid-up with potential plans for conversion to LNG FSOs or FSRUs.
In addition, conversion shipyards in Asia, particularly in China and Singapore have capacity for FSRU conversion projects. At the same
time, the Korean shipyards that constructed all the new FSRU units are struggling financially.
THE END OF SPECULATIVE ORDERS?
13 of the 17 newbuilt units were ordered on speculation and nine have found contracts by delivery, or shortly thereafter. Four FSRUs
remain on order without a committed contract. However, as these units are ordered before the project requirements are known, the FSRU
may not be a good match with the project. According to Excellerate, a speculative FSRU newbuild priced at $250-300 million USD may
be too large for half the projects out there and too small for one-quarter of them.
YEAR
FSRU UNITS IN
OPERATION
2008 2
2009 4
2010 5
2011 7
2012 7
2013 9
2014 14
2015 18
2016 22
2017 27
2018 35
2020 40

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
FSRU OWNERS
Currently there are five FSRU owners with units in operation. Four additional companies
have units on order. Golar leads the way with eight units, closely followed by Excelerate
and Hoegh with seven units each. Excellerate has moved its LNG regas vessels into the
FSRU market, while Golar and Hoegh have expanded rapidly by ordering the majority
of their FSRUs on speculation. BW Gas and Exmar followed this example and placed
speculative orders in 2013 and 2014.
New players are also entering the FSRU market, including LNG ship-owners, such as
MOL and Gaslog, as well as FPSO contractors like Bumi Armada.
THE FUTURE?
FSRU orders will be divided between newbuilds, conversions, redeployment of LNG
REGAS VESSELS,
and regas barges with LNG FSOs.
Energy Maritime Associates is tracking 40 projects that could require an FSRU and/or
LNG FSO. In the next five years Energy Maritime Associates forecasts:
§ 4–6 orders for newbuilt FSRUs (most will be 170,000m3)
§ 4–6 contracts using existing LNG regas vessels or redeployed FSRUs
§ 5–7 orders for regas barges with LNG FSOs
§ 2–6 orders for converted FSRUs

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
Click here information about current FSRUs
These two interactive maps represent the global fleet of FSRUs in operation, those currently on order and the projects still in the planning phase. This information was kindly provided
by Energy Maritime Associates.
THE GLOBAL FSRU MAP - 2016 AND BEYOND

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
Click here for planned projects
These two interactive maps represent the global fleet of FSRUs in operation, those currently on order and the projects still in the planning phase. This information was kindly provided
by Energy Maritime Associates.
THE GLOBAL FSRU MAP - 2016 AND BEYOND

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RISE OF THE FSRU AND THE LNG MARKET OUTLOOK  2016
n 6-7 September 2016
n Amara Sanctuary Resort Sentosa, Singapore
GAIN NEW INSIGHTS TO KEY ISSUES, INCLUDING:
§ Market opportunities for FSRU projects in the Asia Pacific region
§ Key project updates from experienced project owners including Indonesia, Malaysia, India
§ Latest FSRU technological innovation and solutions including offloading applications,
LNG carrier conversion, ship-to-ship transfers
DO
W
N
LO
AD
AG
EN
DA
FEATURING
Bara Frontasia
Operation and Commercial Director,
Nusantara Regas
Parth Jindal
Managing Director,
Höegh LNG
Stephen Thompson
Manager LNG and Natural Gas,
Poten Partners Australia
Karthik Sathyamoorthy
President,
Galway Group