LNG Yearbook 2016: The Ultimate Guide to Liquefied Natural Gas Infrastructure 2016-2026: Capex Forecasts For Large-Scale Onshore Liquefaction Plants (Export) & Regasification (Import) Terminals, FLNG, FPSO, FSRU Vessels, Small-Scale LNG Bunkering, Fuelling, Satellite Stations & LNG Carriers GTT No. 96, T-Mark III & Mark III Flex, Moss Rosenberg & SPB Technologies

LNG, also known as liquefied natural gas, is created by cooling natural gas to -162°C.  At this temperature, the gas takes a liquid form and occupies a much smaller space.  Because it occupies a smaller space it can be transported in LNG Carriers. These are more viable than offshore pipelines which are generally limited to short to medium distances offshore. This unique report brings together analysis of four LNG infrastructure submarkets including large-scale onshore liquefaction and regasification, LNG carriers, floating LNG and small-scale LNG infrastructure covering the period 2016 to 2026.

LNG Infrastructure market definition

This LNG Yearbook 2016: The Definitive Reference Guide to Liquefied Natural Gas (LNG) covers capital expenditure on large-scale onshore liquefaction and regasification, LNG carriers, Floating LNG and small-scale LNG infrastructure covering the period 2016 to 2026. Definitions of each of these submarkets are provided below.

Large-Scale Onshore Liquefied Natural Gas Infrastructure Definition

Onshore LNG infrastructure is defined by this report as an onshore liquefaction or regasification terminal where each train has a capacity of 1.0mmtpa (million tonnes per annum) or more.  This means that if each individual train of the liquefaction terminal is less than 1.0mmtpa, then it is excluded from this report and deemed as small-scale LNG.  For further clarification, this also excludes any regasification terminals with a total capacity of 1.0mmpta.

The market forecasts within this report quantify the total capital expenditure on the LNG terminal development, and in the case of a greenfield development this usually includes the upstream or midstream elements.

CAPEX is defined as the engineering, procurement and construction (EPC) cost of constructing or retrofitting the LNG import or export terminal (also known as regasification and liquefaction).  Therefore, the forecasts included within do not include any feasibility, pre-FEED or FEED (front end engineering and design) costs; only the EPC and, where it is not possible to exclude them with precision, the associated infrastructure and hydrocarbon development costs.

The EPC expenditure is divided evenly over the course of construction period.  Visiongain acknowledges that procurement and capital commitments will vary year-on-year during the EPC.  However, we take the view that this even split of CAPEX across the construction period – when multiple projects are taken into account and added together – provides the most informative picture of expenditure trends in each market space and globally.

LNG Carriers Market Definition

  • Capital Expenditure – year-on-year – for Large-scale LNG carriers using four containment technologies Moss, No.96, Mark III and SPB.
  • Capital Expenditure – year-on-year – by the three leading national construction markets: South Korea, China, Japan and forecasts for a new regional market in India. Included in these national markets are both large-scale and small-scale LNG carriers.
  • Capital Expenditure – year-on-year – on small-scale LNG carriers that can carry up to 50,000cm.

Financing arrangements will be different for each vessel, with the capital expenditure dispersed differently with each contract. Spreading ship cost (CAPEX) equally, from the point at which the contract is signed for a new LNG carrier build until the point at which the vessel is delivered, communicates both the size of this construction market and the flow of orders by number of vessels. For example if a vessel costing $210m was ordered in January 2010 and delivered in January 2013, capex of $70m is attributed in years 2010, 2011 and 2012.

Visiongain excludes from the market definition the following items:

  • Maintenance, repair and overhaul (MRO) services
  • Modernisation, upgrade and retrofit
  • Operational Expenditure (OpEx)

 Floating Liquefied Natural Gas (FLNG) Definition

The global market for floating liquefied natural gas (FLNG) is herein defined by and divided into two distinct areas:

(1) Future capital expenditure (CAPEX) on floating liquefaction plants. This includes all FEED (Front End Engineering and Design), conversion or vessel construction costs.  These vessels are referred to as Liquefied Natural Gas Floating Production, Storage and Offloading Vessels (LNG FPSOs).

(2) Future capital expenditure on floating regasification units.  This includes all FEED, conversion or vessel construction costs.  These vessels are referred to as Floating Storage and Regasification Units (FSRUs).

This report addresses each of these submarkets separately, quantifying the CAPEX expected over the next ten years, from 2016-2026. Both types of FLNG vessel typically operate on long term contracts in fixed locations, so this report assigns capital expenditure to the regions and nations where the vessel is destined to be operating.  Doing so delineates regional markets and elucidates the appetite for FLNG in particular areas. Figure 2.5, displays this market structure. The size of this market and the flow of orders by number of vessels are communicated by spreading ship cost equally, from the point at which the contract is signed for a new floating LNG vessel build, until the point at which the vessel is delivered.

The global market defined in this report purposefully excludes capital expenditure on other infrastructure and vessels that may be associated with or similar to LNG FPSO and FSRU vessels. For example, it excludes additional pipelines associated with the aforementioned vessels. This report also does not consider LNG carriers – the vessels that transport LNG from one destination to another – as part of the FLNG market. Finally, this report does not include projects which may be floating but do not strictly liquefy or regasify natural gas. The lchthys Project in the Browse Basin offshore Western Australia is one example. That project has several floating components that handle natural gas in its various stages, yet none of the floating components technically liquefy or regasify the natural gas.

The Floating Liquefaction, Storage and Offloading (FLSO) vessel proposed by Excelerate Energy and the Floating Liquefaction, Regasification and Storage Unit (FLRSU) being constructed for Exmar and Pacific Rubiales are, however, included in the market forecast (both in the LNG FPSO section).

Small-Scale LNG Infrastructure Definition

This report defines the market sector as including:

  • Capital Expenditure (Capex) on regasification terminals with receiving capacity less than 1 mtpa including import terminals built for the purpose of receiving and storing LNG for bunkering.
  • Capital Expenditure (Capex) on liquefaction plants with liquefaction capacity less than 1 mpta including those used for peakshaving.
  • Capital Expenditure (Capex) on LNG satellite stations including those used for peakshaving.
  • Capital Expenditure (Capex) on LNG Bunkering Facilities: Expenses at ports and other locations to allow LNG bunkering from stationary facilities, Bunker vessels used for ship to ship bunkering, facilities to allow truck to ship bunkering and LNG bunker barges. These include the construction of docks and associate infrastructure to accommodate operations.
  • Capital Expenditure (Capex) on stations that provide LNG fuelling. For stations providing multiple types of fuels, capex was attributed accordingly.

Visiongain excludes from the market definition the following items:

  • Maintenance, repair and overhaul (MRO) services
  • Modernisation, upgrade and retrofit
  • Operational Expenditure (OpEx)
  • Personnel costs

For each of the submarkets examined, capex is attributed equally to the years between construction start up and expected completion date to represent more accurately the market value.

To access an Executive Summary to this report please contact Sara Peerun, at sara.peerun@visiongainglobal.com or refer online for Sample Pages.

LNG Yearbook 2016: The Ultimate Guide to Liquefied Natural Gas Infrastructure 2016-2026

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