Global FSRU Market to Grow 9% in Next Three Years

The global floating storage regasification unit (FSRU) market is expected to post a CAGR of over 9% during the period 2018 – 2022, said a market research report. However, the growth momentum of the market is expected to decelerate during the year-over-year growth.

According to a report from Technavio, stabilisation of crude oil prices is one of the major trends being witnessed in the global FSRU market 2018 – 2022.

From 2014 to 2016, crude oil prices have witnessed fluctuations with steep variations in the price of crude oil per barrel, even though the market did not observe any reduction in the quantity of crude oil supplied across the globe.

The volatility of crude oil prices affects the entire value chain as well as exploration and production activities as these activities solely depend on the profitability of the industry. In 2014, fall of crude oil prices led to a number of E&P activities being put on hold.

According to Technavio analysts, one of the key factors contributing to the growth of the global floating storage regasification unit market is the cost competitiveness of FSRU.

An FSRU uses a hybrid ship for the transportation of LNG from its source of production to different regions across the globe. These ships offer a solution to the shortage of fuel and help in meeting the power requirements across various end-users.

Furthermore, they offer quick transportation of LNG, which drives the rate of adoption of FSRU. These vessels are docked in a port or at sea where the LNG is regasified and fed it into the transmission network and later delivered to the end-user.

According to a senior analyst at Technavio, “Crude oil continues to be the most preferred fuel type for power needs, and oil dominates the fuel industry owing to its ease of pumping into fleets for transportation. As natural gas was transported through pipelines, this mode of transportation restricted the demand for LNG in the market. The number of FSRU fleets operated across the world as a result of new construction of fleets or the conversion of existing fleets is increasing owing to the global need to reduce emissions and use clean fuels for power requirements.”

The power generation segment held the largest market share in 2017, accounting for 55% of the market. This end-user segment is expected to dominate the global market throughout the forecast period.

EMEA led the market in 2017 with a market share of nearly 53%. This region is expected to dominate the market through 2022, with nearly 2% increase in its market share.