Growth in world oil demand, strong oil prices and concerns over supply disruption are among the factors driving growth in the floating production market, according to a recent report by the International Maritime Associates (IMA).
Fourteen floating production units have been ordered over the past four months - including the world's first floating liquefied natural gas (FLNG) vessel – a record pace reflecting strong underlying market drivers, according to IMA. The 1.5 percent to two percent growth in global oil demand per year means that new sources of oil supply need to be developed. To develop these resources, oil and gas companies are increasing their deepwater exploration and production spending.
Jim McCaul, head of IMA, said, "Few if any business sectors can match the dynamism, growth predictability and investment attractiveness of the floating production market."
At $3 billion, the Prelude FLNG is the most expensive floating production unit ordered to date. Other orders include nine floating production storage offloading vessels (FPSOs) - including one purpose-built unit, six units converted from trading tanker hulls and two modification/redeployments - two production spars and two purpose-built floating storage regasification units (FSRUs). Total value of the 14 construction contracts exceeds $11 billion.
Current order backlog consists of 53 production floaters, a net increase of six units since March. This extends the buildup in backlog that began in the second half of 2009. Twenty-eight units utilize purpose-built hulls, 25 are based on converted tanker hulls. Twenty units are being built for leasing operators, 33 directly for field operators.
In the report, IMA identifies 196 projects in the bidding, design or planning stage that potentially require a floating production or storage system. These projects are declared discoveries or planned develop where a floating production or storage system is being considered as the development option.
Of the 196 planned projects, 53 are in the bidding or final design stage. Major hardware contracts for these projects are likely to be awarded within the next 12 to 18 months. Another 143 floating projects are in the planning or study phase. Major hardware contracts for these projects are likely in the 2013 to 2018 timeframe.
Brazil is the most active region for future projects, with 50 potential floater projects in the planning cycle. Southeast Asia is second with 37 projects, followed by West Africa with 36 projects, Northern Europe with 22 projects, Gulf of Mexico with 17 projects and Australia with 11 projects.
Currently, 256 floating production systems are in service or available worldwide; FPSOs comprise 62 percent of this inventory. The balance of the fleet is comprised of production semis with 17 percent; nine percent is tension leg platforms; seven percent is production spars; and five percent is production barges and FSRUs. Of the total production floater inventory, 11 units are currently off field and available for reuse – making the effective utilization rate of 95.7 percent.
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