Slow Year Ahead for Floating Production as Industry Downturn Bites
In contrast to the FLNG that Royal Dutch Shell plc is building for the Prelude gas field offshore Western Australia and the 2 FLNGs that Petroliam Nasional Berhad (Petronas) has ordered for deployment offshore Sabah and Sarawak off East Malaysia, Boggs explained that the ones under conversion for Golar are “purely for liquefaction … They are not doing any of the pre-processing, so it has been an interesting development to see.”
China Eyes FLNG Market
China, already established in offshore segments like rigs and offshore supply vessels, has ambitions to extend its reach into the FPS market, including FLNG.
Shanghai-based Wison Offshore & Marine has been contracted by Belgium’s Exmar NV to deliver two FLNGs, with the first – Caribbean FLNG – scheduled for delivery to Colombia for installation in the second half of 2015, later than the original timeline at the end of the June 2015 quarter due to unfavorable energy market conditions.
China appears keen to boost the participation of its yards in the FLNG segment. The Ministry of Science and Technology has named Wison’s Caribbean FLNG liquefaction and storage project a “National Key New Product” under the National New Products Program (NNPP), Wison said in a Feb. 4 press release. The NNPP aims to improve companies’ technology innovation and increase competitiveness of Chinese products.
But the success of Chinese yards in the overall FPS market is fairly mixed. Last year, China did not secure any FPSO contracts, with larger yards such as Cosco Corp. failing to gain any orders. In fact, Cosco maintained a cautious outlook when it announced its 2014 financial results in mid-February, citing the slowdown in the global offshore market.
Still, Boggs observed that “a lot of the conversion work, especially “dirty work” [like] steel repair, blasting is more and more being done in China because it is far cheaper than in any other parts of the world.”
However, newbuild FPSO projects are mostly undertaken by South Korea’s “Big Three” yards – Daewoo Shipbuilding and Marine Engineering, Hyundai Heavy Industries and Samsung Heavy Industries. Singapore yards, comprising Keppel and Sembcorp Marine Ltd., are still the preferred choice for FPS conversions.
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