2016 • A supplement to LNG World Shipping

“Our target is to be involved with two projects by year-end – and we are still on target”
Bruno Larsen, GasLog head of FSRU development, see page 4
Offshore LNG supplement 2016
contents

02

04 Offshore analysis
2 Tens of floating LNG-import terminals have been proposed around the world
– but tapping that demand may not be straightforward. Karen Thomas reports

Offshore interview
4 GasLog wants to move from conventional LNG carriers into floating storage
and regasification units (FSRUs). Bruno Larsen and Jamie Buckland set out the
company’s strategic plans
8 This summer, BW LNG contracted its second FSRU and ordered its
third. Managing director Yngvil Asheim explains why the company favours
newbuildings over conversions
08

Offshore profile
10 Excelerate Energy landed two of the four new FSRU contracts awarded
by October this year. Now, as founder and chief executive Rob Bryngelson
explains, the US specialist is closing in on the first FSRU project in Bangladesh

Offshore solutions
15 Norway-based Kanfer has devised a tug and barge-based LNG-import
solution. But can it find investors to turn its concept into a live venture?
10

Offshore viewpoint
16 Can floating LNG (FLNG) projects convert flare gas into LNG cargoes? Lanner
Group consultant Steve Jones weighs up the opportunities and the challenges

Front cover image © BW LNG

www.lngworldshipping.com Offshore LNG | November/December 2016

2 | ANALYSIS Offshore LNG supplement
THE FSRU OWNERS’ CLUB STAYS
SMALL, DESPITE SOARING LNG
IMPORT DEMAND
Annual FSRU-based LNG imports rose
last year by 46 per cent to 20.2 mta
D
espite a growing impetus for new importers to turn
to gas to take advantage of its ever-cheaper prices,
floating storage and regasification units (FSRUs)
remain a niche activity.
At the time of writing, Wood Mackenzie figures show 17 FSRUs
operating around the world, plus two buoy-based terminals. Four
floating storage unit (FSU) projects are now confirmed and four
new FSRU-based import projects had been contracted – or were
due to start – in 2016.
The newest is the Total-led project in Cote d'Ivoire, West
Africa, to which Golar LNG will supply and manage an FSRU from
summer 2018. Golar has yet to say whether it will deploy one of its
eight live and on-order FSRUs, exercise one of its two options, or
convert an LNG carrier newbuilding order.
Singapore’s BW LNG has agreed a 15-year deal with Pakistan
GasPort to place its second FSRU at Port Qasim in Karachi
from next summer. Hull 2118, due for delivery by year-end, has
capacity for 170,000m³. The Pakistan contract has prompted BW
to convert one of its conventional LNG carrier orders at Daewoo
Shipbuilding & Marine Engineering (DSME) into an FSRU, for
delivery by early 2020.
This summer, US-based Excelerate Energy delivered its
138,000m³ FSRU Excelerate to new importer Abu Dhabi. The
FSRU is moored at Ruwais LNG terminal under contract to Abu
Dhabi Gas Industries (GASCO).
And finally, the 170,000m³ newbuilding Höegh Grace is due
to handle the first imports into Colombia in the fourth quarter
of the year.
Coming next is likely to be Ghana, where the 170,000m³ Golar
Offshore LNG | November/December 2016 www.lngworldshipping.com
Tens of floating LNG-import terminals
have been proposed around the world –
but it may be less straightforward to tap
this growth than many market entrants
expect, even though yet more projects
are coming. Karen Thomas reports
LNG FSRU Golar Tundra is expected to enter service by first-
quarter 2017.
Also due next year is the first of two planned FSRU projects
to be based on Moheshkhali Island in Bangladesh. Here,
Excelerate is finalising its deal with Petrobangla to supply a
139,000m³ FSRU for 15 years, to support the country’s initial
US$1.6 billion import plan. Excelerate's turret loading buoy
vessel will process up to 3.5 mta.
Meanwhile, FSUs are gaining ground, too – providing
employment for surplus older and unfixed tonnage. The first
combined FSU/floating regasification unit (FRU) operation started
in Bali, Indonesia in May.
New Fortress Energy was about to take delivery of the
138,000m3 Golar Arctic, chartered for two years to store LNG off
Montego Bay in Jamaica, to supply a converted power plant. Malta
was about to take delivery of the Bumi Armada-owned 125,582m³
FSU Armada LNG Mediterrana to store and supply gas for Malta’s
Delimara power station.
And in summer 2018, a converted Teekay LNG newbuilding,
thought to be Hull 2461, will start its 20-year contract to support
import start-up Bahrain LNG.
Growth prospects
The small number of live and confirmed projects disguises the
surge in interest in floating imports as a cheaper and quicker route
to market – and belies some impressive growth.
Last year, FSRU-based LNG imports increased by 46 per
cent compared with the previous year to 20.2 mta, according
to the US-based Energy Information Administration (EIA). New
Offshore LNG supplement ANALYSIS | 3
importers Jordan, Egypt and Pakistan accounted for 85 per
cent of that growth.
New proposals emerge weekly. Indonesia alone says it will
need seven additional FSRUs, increasing its total fleet to nine,
by 2020.
Wood Mackenzie lists up to 70 proposed FSRUs and floating
storage projects around the world. It has also identified some 60
gas-to-power projects, particularly in Indonesia, West Africa and
the Caribbean.
Many more projects are being discussed than will come
to market – some are speculative ventures driven by private
companies with no FSRU experience, while others, that may
have government involvement, become mired in red tape. Even
projects that reach a final investment decision find that their
timeframes slip.
“In a lot of emerging markets, projects are being driven
by state-owned or international oil and gas companies,” says
one shipping source. “That can really make a difference to
projects’ prospects. That level of involvement can make projects
immediately more bankable. It’s less about geography than about
finding the right customer – one that’s credible and credit-worthy.”
Höegh expects three to four FSRU contracts to be awarded
every year to 2021. GasLog, hitherto an owner and operator of
conventional LNG carriers, is interested in moving into the FSRU
space but is more bearish. It expects two to three new projects to
sign firm contracts every year for the next decade.
Just six companies own the live FSRU fleet: Excelerate Energy,
Golar LNG, Höegh LNG, BW Gas, OLT and Mitsui OSK.
Opportunities in floating imports contrast with a conventional
LNG-carrier market in which ships are standing idle. This reflects
delays to new export projects, exacerbated by closures in Yemen
and Angola. Little wonder that owners of conventional LNG carriers
are taking a long, hard look at FSRUs.
COMING UP
– THE FSRU TBC
PROJECTS
TO WATCH
Golar Power
Sergipe, Brazil
3.6 mta 5 mta
KG LNG Petrogas
Kakinada, India Krishnapatnam, India
www.lngworldshipping.com Offshore LNG | November/December 2016
Teekay LNG, Gazprom and Exmar each have one confirmed
order apiece. Dynagas looks set to become the first Greek
shipowner to enter the FSRU segment, having booked two FSRU
newbuildings from Hudong-Zhonghua Shipbuilding in China this
summer, for delivery in 2019 and 2020.
GasLog, Maran Gas and TMS Cardiff Gas now also hope to
move into FSRUs. The latter may convert one of its conventional
LNG carriers into an FSRU.
But how quickly newcomers can move into this space is
unclear. Many invitations to tender are open only to players with
experience in the field. Established player Excelerate believes that
FSRUs present daunting barriers to entry.
“The limiting factor is that the risks are different,” Excelerate
founder and chief executive Rob Bryngelson told LNG World
Shipping. “Some shipowners are OK with that; many of them
aren’t. The club has stayed small because FSRUs aren’t as easy as
many people think.
“The difference between us and our competitors is that we are
not just focused on the ship. We build the jetties and the marine
infrastructure for the project, and that’s even more risky. But it
provides the customers with the complete solution.
“A big part of our job is risk management. We have the
proper contracts and counterparties in place. If there are
issues, we are protected.”
BW LNG managing director Yngvil Asheim agrees. “We expect
the number of players in the FSRU market will remain low for
some time – barriers to entry remain high,” she says.
“Project delivery requires a dedicated team with years of
relevant experience. Moreover, nine of the last 12 FSRU contracts
have been awarded to vessels that were ordered speculatively.
Few companies have the balance sheet to commit to a speculative
newbuilding FSRU, yet this is increasingly a prerequisite to
winning projects.” LNG
5 million
tonnes
a year (mta)
5.6 mta
Eos Investment EGAS
Talcahuano, Chile Ain Sokhna, Egypt
TBC 7 additional
FSRUs
by 2020
Reliance Power Various
Maheshkhali, Bangladesh Indonesia
4 | INTERVIEW

GASLOG CIRCLES THE

FSRU OWNERS’ CLUB
A
Monaco-based shipowner GasLog t GasLog’s glass-lined
offices on Kings Road
has set its sights on offshore LNG in west London, a
imports as an owner and manager of new strategy team formed
early this year is preparing
floating storage and regasification units to bring the company’s
(FSRUs). But, as Bruno Larsen and Jamie first floating storage and
regasification units (FSRUs)
Buckland tell Karen Thomas, it takes time project to fruition.
to land the right project The team, led by head of
FSRU development Bruno
Larsen, is in talks with several
yet-to-be-named prospects.
It is discussing the options
with shipyards in Singapore
and South Korea as GasLog
prepares to bring its first
FSRU solution to market.
GasLog announced at its
capital markets day in June
that it intends to be involved
with two active FSRU
projects by year-end. It has
put together a detailed pitch
to persuade its investors of
the business case for investing
in FSRUs.
The clock is ticking as
the year draws to a close. So
will the company meet that
deadline to announce at least
one deal this side of new year?

GASLOG, FIXTURES FOR LIVE LNG CARRIER FLEET AND ORDERBOOK*, 2019-2026
Vessel name Owner Year of build Capacity, m3 Propulsion Charterer Charter expiry
Hull 2801 GasLog Ltd 2019 174,000 XDF Total 2025
Hull 2131 GasLog Ltd 2018 174,000 XDF Shell 2029
Hull 2800 GasLog Ltd 2018 174,000 XDF Shell 2028
Hull 2130 GasLog Ltd 2018 174,000 XDF Shell 2027
GasLog Gibraltar GasLog Ltd 2016 174,000 TFDE Shell 2023
GasLog Geneva GasLog Ltd 2016 174,000 TFDE Shell 2023
GasLog Glasgow GasLog Ltd 2016 174,000 TFDE Shell 2026
GasLog Greece GasLog Ltd 2016 174,000 TFDE Shell 2026
GasLog Salem GasLog Ltd 2015 155,000 TFDE The Cool Pool –
GasLog Saratoga GasLog Ltd 2014 155,000 TFDE The Cool Pool –
Solaris GasLog Ltd 2014 155,000 TFDE Shell 2021
GasLog Skagen GasLog Ltd 2013 155,000 TFDE Shell 2021
GasLog Seattle GasLog Ltd 2013 155,000 TFDE Shell 2021
GasLog Sydney GasLog Partners 2013 155,000 TFDE Shell 2018
GasLog Santiago GasLog Partners 2013 155,000 TFDE Shell 2018
GasLog Shanghai GasLog Partners 2013 155,000 TFDE Shell 2018
Methane Becki Anne GasLog Ltd 2010 170,000 TFDE Shell 2024
Methane Julia Louise GasLog Ltd 2010 170,000 TFDE Shell 2026
GasLog Chelsea GasLog Ltd 2010 153,600 TFDE The Cool Pool 2016
GasLog Singapore GasLog Ltd 2010 155,000 TFDE The Cool Pool 2016
GasLog Savannah GasLog Ltd 2010 155,000 TFDE The Cool Pool 2016
Methane Heather Sally GasLog Partners 2007 145,000 Steam Shell 2020
Methane Shirley Elisabeth GasLog Partners 2007 145,000 Steam Shell 2020
Methane Alison Victoria GasLog Partners 2007 145,000 Steam Shell 2019
Methane Lydon Volney GasLog Ltd 2006 145,000 Steam Shell 2020
Methane Rita Andrea GasLog Partners 2006 145,000 Steam Shell 2020
Methane Jane Elizabeth GasLog Partners 2006 145,000 Steam Shell 2019

*confirmed as at 10 October 2016

Source: GasLog

Offshore LNG | November/December 2016 www.lngworldshipping.com

 INTERVIEW | 5

“Our target is to be
involved with two projects by
year-end – and we are still on
target,” Mr Larsen says. “We
have managed, within a short
space of time, to get close to a
few good prospects and have
launched a pre-engineering
study with Keppel.”
Singapore-based Keppel
Shipyard made its name in
offshore LNG converting
conventional LNG carriers
into FSRUs and floating
LNG (FLNG) vessels. Is
GasLog preparing to convert
some of its older LNG
carriers into FSRUs?
Whether to order
newbuildings or convert
older vessels divides members
of the FSRU-owners’ club.
Golar LNG owns converted
tonnage and newbuildings. As of October, GasLog
New entrant Mitsui OSK is had 22 LNG carriers
retreating from ownership to on the water and five
focus on FSRU management, confirmed orders
having overrun on costs for

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Charter term Available/under discussion Charterer option

www.lngworldshipping.com Offshore LNG | November/December 2016

6 | INTERVIEW Offshore LNG supplement
its Uruguay newbuilding.
This summer, Höegh LNG
announced a U-turn on
ordering newbuilding FSRUs
on spec, announcing it will
convert to cut time to market
by six months.
At this stage, GasLog will
not contemplate speculative
FSRU orders, says head
of investor relations Jamie
Buckland. The company has
identified two vessel types
from its fleet that are suitable
for conversion.
“We’re now moving into the
next phase and have identified
suitable ships for conversion,”
Mr Larsen says.
“That said, we aren’t
confining ourselves to
converting ships within the
existing GasLog fleet. We
could also move into the
newbuilding space and have
held talks with shipyards
in South Korea about
ordering new tonnage. And
another option is to convert
conventional LNG carrier
newbuildings into FSRUs.
“It’s not a straightforward
comparison between
US$250 million for a
newbuilding versus US$70-
80 million to convert a
vessel. You have to consider
where you will secure most
value to your business from
the vessel in question.”
At the time of writing,
GasLog had 22 LNG carriers
on the water and five on order
at Samsung Heavy Industry
(SHI), having taken delivery
of the 174,000m³ GasLog
Geneva in September. GasLog
is expected to take delivery
of the 174,000m³ GasLog
Gibraltar later this quarter.
The four remaining confirmed
newbuildings will arrive in
2018 and 2019.
GasLog will not comment
on reports linking it to the order
SHI landed for two 174,000m³
newbuildings in September.
At least six older vessels
are conversion candidates,
Mr Larsen told LNG World
Shipping. GasLog could also
Offshore LNG | November/December 2016 www.lngworldshipping.com
convert some younger, DFDE
tonnage – including ships
deployed on short-term and
spot contracts through Cool
Pool, with partners Golar LNG
and Dynagas.
“In the past, only older
ships aged 20-25 years
would have been considered
conversion candidates,” Mr
Larsen says. “Now, younger
vessels are also conversion
candidates, as the LNG fleet
keeps on growing.
“We are looking at a
conversion solution as a
way of inching forward
Bruno Larsen: on target to into the FSRU business.
confirm two FSRU ventures Moving forward with the
by year-end pre-engineering studies and
purchasing long-lead items
is a way to shorten the time
to market.”
Unlike Golar LNG, which
GASLOG IN recently set up a gas-to-
NUMBERS power business-development
unit, GasLog does not
seek direct involvement in
Offices integrated projects.
“Some parties will request
6 some fixed infrastructure,
maybe a jetty or pipeline
Employees connections for offshore
projects – subsea moorings
1,100 and risers similar to those
required for FPSOs,” Mr
Larsen says. “We are prepared
Live fleet to do that... That’s not to
say that we wouldn’t join
22 partnerships, perhaps as
members of a consortium –
LNG carriers
but we’d want to keep things
clearly defined.”
Orderbook* The next stage will be
5 to finance the first FSRUs.
“We are looking now, and,
LNG carriers historically in the LNG carrier
business, we have had access to
Total capacity a variety of sources of capital,”
Mr Buckland says. “The
4.3 risk exposure can be quite
different, country to country
million m³ and customer by customer.
What the banks want is long-
Average age, live fleet term visibility of cashflow,
which is where long-term
5.3 contracts help.
“We have long-term
years
contracts for our conventional
*as at 1 October 2016 LNG carriers with some of
Source: GasLog the biggest names in the
business – with Shell/BG and
with Total. We believe we
can secure financing against a
contracted FSRU on a long-
term charter.”
Contract length is a moot
point in emerging demand
for FSRUs. For would-be
importers seeking to take
advantage of ever-cheaper gas
prices, offshore solutions offer
quicker, cheaper entry – but
many see floating units as a
stop-gap solution.
Several recent contracts,
such as those in Egypt,
have featured notably short
durations. That may present
a barrier to securing finance
– particularly for newcomers
to the FSRU segment. It’s an
obstacle that Mr Buckland is
quick to play down.
“It may be a misconception
that the market has to move
towards shorter-term deals as a
bridge to a land-based solution.
If a country has growing long-
term power requirements it
will need to secure gas for that
power production.
"Often an onshore
alternative may not be
appropriate due to the
significant upfront cost, possible
land restrictions, greater
environmental regulation and
a lack of flexibility to move the
facility if required...
“We don’t believe a five-
year contract will be the
optimum term for many new
importers. Most of the talks
we are having concern long-
term projects. Just last week,
we were invited to discuss a
20-year-plus FSRU project.”
And so the talks continue,
as GasLog works to land
two FSRU projects by year-
end. “Some projects go to
tender quickly, others don’t
but are triggered very quickly,
and others again are under
discussion for many, many
years,” Mr Larsen concludes.
“We have to be patient.
Landing our first FSRU project
won’t happen overnight.
"This is a learning curve for
GasLog.” LNG
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8 | INTERVIEW Offshore LNG supplement
Yngvil Asheim: FSRUs are
the ideal solution to access
new markets that can
absorb surplus LNG
FSRUs create
opportunity
for ‘homeless’
LNG, says BW
LNG boss
BW LNG has just decided to convert one of
its four LNG carrier newbuildings to become
its third floating storage and regasification
unit (FSRU), having contracted its second to
Pakistan this summer. Karen Thomas asked
managing director Yngvil Asheim to outline
BW LNG’s offshore growth plans
Offshore LNG | November/December 2016 www.lngworldshipping.com
Congratulations on
placing your second
floating storage and
regasification unit
(FSRU) in Pakistan.
Please can you update
us on the project?
We’re very proud to have
been selected as the FSRU
supplier for Pakistan’s second
LNG import project and look
forward to a strong partnership
with Pakistan GasPort to
deliver much-needed natural
gas to the Pakistan market by
the end of June 2017.
Our second FSRU is
capable of sending out up to
750 million ft3 of natural gas
per day, equivalent to more
than five million tonnes a year
(mta) of LNG. The project
should reduce Pakistan’s gas
deficit by 30 per cent and
ensure fuel for 3.6GW of new
gas-fired power plants, which
should reduce Pakistan’s power
outages by 80 per cent.
Your first FSRU is based in
Egypt. Can you update us
on this project?
BW Singapore has been
operating in Egypt since
October 2015 and its
performance has been
exceptional. The vessel was
delivered and commissioned
in only three months – faster
than any other FSRU project
to date.
We co-operated closely with
the charterer, the Egyptian
Natural Gas Holding Company
(EGAS). We tapped BW’s
40-plus years of gas expertise
and we leveraged BW’s size
and financial strength, which
enabled us to commit early to
long-lead items and meet the
project timeline.
Today, BW Singapore sends
out more than 600 million ft3
of natural gas each day [4.5
mta of LNG] and receives
a full cargo of LNG every
four to five days. It recently
achieved the milestone of
receiving 50 LNG cargoes by
ship-to-ship transfers in less
than a year in operation. We
believe it is the most fully
utilised FSRU in the industry.
Egypt is hungry for
additional gas and is
seeking a third FSRU.
How interested is BW in
increasing its presence
there, and are Egypt’s
widely reported payment
terms a barrier?
We have received payments of
due hire from EGAS for our
FSRU. BW sees EGAS as a
long-term strategic partner in
the LNG/FSRU space, with
our existing business providing
a strong foundation. We will
always see how we can support
Egypt’s additional demand for
natural gas.
How many FSRU
projects are you
discussing at any one
time and how quickly do
you expect to contract
your third newbuilding
and then to consider
additional tonnage?
The FSRU market is very
active. At any given time
we are evaluating 30-40
potential FSRU projects. In
August, we contracted our
third newbuilding at Daewoo
Shipbuilding & Marine
Engineering (DSME) with
storage capacity of 173,400m3.
This FSRU will be
delivered by early 2019,
enabling us to meet the
timeline of many promising
upcoming developments. The
FSRU business is a growing
one for the BW Group
and we are always on the
lookout for good projects and
additional tonnage.
How quickly does BW
expect global FSRU
demand to grow and
which markets most
excite you?
We expect continued healthy
growth in the global FSRU
market. Countries are
seeking reliable, efficient and
affordable LNG imports that
can be delivered in one or two
Offshore LNG supplement INTERVIEW | 9

years. Only FSRUs can satisfy How do you expect

BW GROUP, GAS CARRIER FLEET
these requirements. FSRUs the FSRU market to
enable first time importers evolve from the small, Ship type number capacity, m³
to access the global LNG select club of owners LNG carriers 21 3,274,012
market. The next two to three it still is – how many LPG carriers 49 3,880,141
years will see a significant new ships, how many
increase in LNG production market entrants?
coming online. Much of We expect the number of
this new LNG is homeless, players in the FSRU market will
meaning it is contracted to remain low for some time as
portfolio players but lacking a barriers to entry remain high. BW LNG FLEET
downstream buyer. Operational experience is a Ship name Year of build capacity, m³
FSRUs are the ideal prerequisite for many tenders, DSME Hull 2489 (FSRU) 2019 173,400
solution to enable access to new for example. Project delivery
DSME Hull 2488 2019 173,400
markets that can absorb these requires a dedicated team with
additional supplies of LNG. years of relevant experience. DSME Hull 2436 2018 173,400
Such markets may be located Moreover, nine of the last DSME Hull 2435 2017 173,400
in Asia, the Middle East, West 12 FSRU contracts have been
SHI Hull 2118 (FSRU) 2016 170,000
Africa and Latin America. awarded to vessels that were
ordered speculatively. BW Singapore (FSRU) 2015 170,000
To what extent does Few companies have BW Pavilion Vanda 2015 161,870
your recent decision to the balance sheet to BW Pavilion Leeara 2015 161,880
switch a conventional commit to a speculative
BW GDF Suez Brussels 2009 162,514
LNG-carrier order newbuilding FSRU, yet this
into one for an FSRU is increasingly a prerequisite BW GDF Suez Paris 2009 162,524
indicate a strategic to winning projects. LNG Imo 2008 148,300
shift? Could more such LNG Kano 2007 148,565
conversions follow? How long do you expect
The LNG carrier market has today’s oversupply of LNG Ondo 2007 148,478
always been a steady business tonnage to continue and LNG Lokoja 2006 148,471
in BW’s shipping portfolio. how soon or how long LNG Benue 2006 145,952
Today we have a fleet of 15 will it take for BW and
LNG Enugu 2005 145,926
LNG carriers, all on medium the rest of the industry
to long-term charters. We have to resume orders for LNG Oyo 2005 145,842
been in the LNGC market new tonnage? Berge Arzew 2004 138,089
since the 1980s and will We have three LNG carriers
LNG River Orashi 2004 145,914
continue to operate and grow on order with DSME. With
in this segment. more liquefaction trains BW GDF Suez Boston 2003 138,059
The recent conversion was coming online over the next BW GDF Suez Everett 2003 138,028
a business decision made to few years, we expect the LNG
tap into growth in the FSRU shipping market to improve.
market and to optimise our Conventional LNG
portfolio of LNG/FSRU assets. shipping remains a core focus
Conventional LNG shipping for BW.
remains a core focus for BW.
Finally, these are
Could you convert older tough times: what
vessels to grow your opportunities and
FSRU fleet? challenges are keeping
BW certainly has the in-house you busiest?
engineering expertise to The LNG shipping industry
manage conversion of older has always been cyclical and we
LNG vessels into FSRUs. believe that BW, as a group, is
Bearing in mind that converted well-positioned to ride through
FSRUs tend to have smaller the cycle.
storage capacities and are Our approach to the LNG
less fuel-efficient than business is based on building
FSRU newbuildings, we will long-term partnerships
undertake such conversions with our customers and that
only if the project economics approach will help us to
favour this approach. weather the tough times. LNG BW Singapore – “the most fully utilised FSRU in the industry”

www.lngworldshipping.com Offshore LNG | November/December 2016

10 | PROFILE Offshore LNG supplement
Excelerate: ‘Everyone wants
an FSRU quickly – and every-
one wants it cheap’
Rob Bryngelson: looking
at demand for small-scale
LNG imports
Offshore LNG | November/December 2016 www.lngworldshipping.com
This summer, Excelerate Energy landed two of
the four FSRU contracts awarded so far this
year. Karen Thomas asked founder and chief ex-
ecutive Rob Bryngelson where the company sees
its next opportunity
W
hen LNG World
Shipping met
Excelerate founder
and chief executive Rob
Bryngelson earlier this year, he
had a spring in his step and a
twinkle in his eye.
Looking back, it’s hard to
know whether his impending
deal to place the 138,000m³
Excelerate in Abu Dhabi or
more general excitement
about floating import
prospects put the Excelerate
boss in buoyant mood.
Clearly, though, the Houston-
based company, owner of
the world’s largest floating
storage and regasification
unit (FSRU) fleet, is in prime
position to tap growing
demand for these vessels.
FSRUs offer a quicker,
cheaper option than land-
based LNG-import terminals.
The FSRU fleet stood at
23 vessels worldwide,
with a combined capacity
of nearly 3.5 million m³ at
year-end 2015, according
to the International Group
of Liquefied Natural Gas
Importers (GIIGNL).
Analysts expect three or
four FSRU contracts to be
awarded annually to 2021. At
any given time, Mr Bryngelson
says, around 40 FSRU projects
are being proposed around
the world. Of these, Excelerate
is following half and working
to land six to eight.
“You never know when
one project that has lain
dormant will start to move –
because there’s a new energy
minister, or new demand –
and suddenly it becomes a
national priority,” he says.
At the time of writing,
just four new FSRU contract
awards had been confirmed
this year – to Excelerate in
Abu Dhabi and in Bangladesh,
to BW in Pakistan and to Golar
LNG in Ivory Coast.
Two new floating storage
units (FSUs) supplement these
new FSRUs. The first entered
service off Bali in Indonesia
in May. The second involves
Golar LNG, which is modifying
its 138,000m³ LNG carrier
Golar Arctic as an FSU, to be
moored off Montego Bay to
store LNG in Jamaica.
Hot prospects
Excelerate sees the Middle
East, the Indian subcontinent,
sub-Saharan Africa and South
America as the most promising
FSRU markets. In June, it
agreed to charter a 138,000m³
FSRU to import up to 3.5 million
tonnes a year (mta) through
Moheshkhali in Bangladesh.
The company takes a
two-pronged approach. One
is to convert LNG carriers
into FSRUs. The other is to
order newbuildings. Within
the next year, Mr Bryngelson
hopes to order one
newbuilding and to complete
“another couple” of projects
under long-term discussion,
including Bangladesh.
Cost, timing and fit
are everything in offshore
imports, he says. “Everyone
wants their FSRU quickly –
and everyone wants it cheap.
It really comes down to a
combination of timing, price
and availability. There’s no
one right answer.
“If the customer has three
years before they need to
have an FSRU in service,
they may go for a newbuild.
If they need it in 18 months, a
conversion is the solution. Or
we can offer an existing vessel
as a bridge. With Petrobras in
Brazil, we offered a bridging
vessel, then delivered a
purpose-built vessel in 2014.”
This summer, Norway-
based FSRU owner
Höegh LNG reversed its
newbuilding-only policy to
Offshore LNG supplement PROFILE | 11
convert an LNG carrier to
get the vessel to market
faster. The newbuild-versus-
conversions debate baffles
Mr Bryngelson, who prefers
to decide project by project.
“I don’t know what the
controversy is,” he says. “We
can build a conversion that is
as fuel-efficient as a newbuild
ship. We can do it cheaper
and in a shorter period of
time. But if you need a highly
specialised vessel with very
large capacity – like our Dubai-
based Explorer, which can put
out 1 billion ft³/day – you will
probably need a newbuild.
“We are not aggressively
ordering speculative
newbuildings – because what
would you build? There are
projects that probably need
only 200-300 million ft³/day
of natural gas and others that
may need 500-600 million ft³/
day, or over 1 billion ft³/day.
“If you were to build
speculatively, it could be for
any one of those projects.
You’d end up forcing what
you had onto a project, not
delivering what it needs.
That’s not to say we may
not keep a little speculative
length – we may well do so at
some point. But that’s really
not our sole strategy.”
New business
An old hand in a new
business, this year Excelerate
completed its thousandth ship-
to-ship LNG transfer. It hit the
headlines this spring, when the
upgraded 150,900m³ Explorer,
based in Dubai, became the
first FSRU to achieve 1 bcf/day
send-out capacity. Explorer is
also the first FSRU fitted with
an LNG-bunker port to supply
gas as marine fuel.
And yes, Excelerate is
pondering small-scale LNG
projects too. “This is the kind
of bunker-supply operation
that interests us, not building
bunker-supply ships,” Mr
Bryngelson says. “If we can
bunker from one of our
FSRUs, we will definitely do
www.lngworldshipping.com Offshore LNG | November/December 2016
that. It’s a value-added service
that our customers can offer
to their markets.”
Small-scale LNG is exciting,
but complex. Excelerate has
had the talks and drawn up
plans. Mr Bryngelson is not yet
ready to say more.
“We’ve looked at
everything from regas barges
with a storage of 5,000m³
up to 35,000m³-40,000m³,”
he says. “We’ve also looked
at small FSRUs – every
permutation you can imagine,
to see what makes sense.
“Then again, you don’t
want a fleet of 15 very
different vessels. You
need some commonality
for the sake of reliability,
maintainability and cost. When
we started to look at small-
scale, we thought it would be
easy. It isn’t. You have to be
sensitive to the costs.”
Close collaboration will
be critical, he says. “It’s
complex and that’s where
you really need to work
closely with the customer.
“If you have a string of
islands that have LNG demand
in multiple locations, the
question becomes how much
storage you need and whether
you can use other fuels
as back-up in the event of
disruption – that all feeds into
the solution you offer.
“Is it regasification vessels
or regas barges? Do you
need a conventional LNG
carrier or a small-scale carrier?
The technology is the same
but the solutions get more
complicated. Getting a cost-
effective solution demands a
lot more collaboration. That’s
the challenge.
“A conventional FSRU
delivering 500 million ft³/day
at one location is pretty easy.
Five or six locations force
you to think about how you’ll
handle the delivery logistics
for that. It’s something we’re
interested in, yes. But it’s a
much more complicated part
of the market than people
may realise.” LNG
EXCELERATE ENERGY
FLEET LIST:
FSRUs
TBD, 150,900m3
Aguirre Offshore Gasport, Puerto
Rico
Owner: Excelerate Energy
Charterer: Puerto Rico Electric
Power Authority (PREPA)
Contract: Guaranteed contracted
send-out of up to 250 mmcf/day
for 15 years beginning 2018
Experience, 173,400m3
Guanabara Bay, Rio de Janeiro,
Brazil
Owner: Excelerate Energy
Charterer: Petrobras
Contract: Guaranteed contracted
send-out of up to 700 mmcf/day
for 15 years
Excelsior, 138,000m3
Various – supports Petrobras’
LNG activities
Owner: Excelerate Energy
Charterer: Petrobras to 2017
Express, 150,900m3
Supporting Excelerate’s chartering
activities
Owner: Excelerate Energy
Expedient, 150,900m3
GNL Escobar, Argentina
Owner: Excelerate Energy
Charterer: JV Repsol-YPF
Contract: Guaranteed contracted
send-out of up to 500 mmcf/day
Excellence, 138,000m3
Hadera Gateway, Israel
Owner: Excelerate Energy
Charterer: Israel Electric Corp
Contract: Guaranteed contracted
send-out of up to 500 mmcf/day
“You need some commonality for the
sake of reliability, maintainability and
cost. When we started to look at small-
scale, we thought it would be easy. It isn’t.
You have to be sensitive to the costs”
Explorer, 150,900m3
Jebel Ali LNG Terminal, Dubai,
UAE
Owner: Excelerate Energy
Charterer: Dubai Supply Author-
ity (DUSUP)
Contract: Guaranteed contracted
send-out of up to 1 bcf/day deliv-
ery for 10 years
Exquisite, 150,900m3
Port Qasim, Karachi, Pakistan
Owner: Excelerate Energy
Charterer: Engro
Contract: Guaranteed contracted
send-out of 690 mmcf/day for
15 years
Exemplar, 150,900m3
Bahía Blanca GasPort, Argentina
Owner: Excelerate Energy
Charterer: YPF
Contract: Guaranteed contracted
send-out of up to 500 mmcf/day
Excelerate, 138,000m3
Ruwais LNG Terminal
Owner: Excelerate Energy
Charterer: Abu Dhabi Gas Indus-
tries Ltd (GASCO)
Contract: Guaranteed contracted
send-out of up to 500 mmcf/day
LNG carrier
Excalibur, 138,000m3
Various – supports Petrobras’
LNG activities
Owner: Excelerate Energy
Charterer: Petrobras to 2017
12 | GASTECH Advertorial Offshore LNG supplement
Tokyo meeting draws gas &
LNG leaders together to select
Gastech 2017 programme
I
n late October in Tokyo, meeting in a room overlooking the
Emperor’s imperial palace and gardens, some of the most
influential figures in global gas and LNG gathered to agree on the
final conference agenda for Gastech 2017: the world’s largest event
for gas and LNG professionals. These meetings are a rare occurrence
and take months of planning, with so many busy diaries to juggle and
compromises to be made. However, with ten of the most influential
Japanese companies in the energy value chain hosting next year’s
Gastech, excitement has been building over the past year, and we were
delighted to be able to welcome more than 40 senior individuals over
the course of two days’ of meetings to help shape the agenda.
The meetings in Tokyo were led by Gastech’s organisers, DMG
Energy Events, but hosted by the group of 10 Japanese companies who
will welcome the global community next April. Four of these companies
in particular have led the way in driving interest and awareness in Gastech
Japan, namely Tokyo Gas, JERA, Mitsui and Mitsubishi who have shown
great enthusiasm for bringing this global event to Japan’s shores for the
first time in its 45 year history. Shigeru Muraki of Tokyo Gas (fondly
known as “Mr Gas” such is his reputation both in Japan and around the
world), led the way in attending the meetings, drinks receptions and
evening dinner, demonstrating boundless enthusiasm and a willingness
to share his extraordinary professional knowledge with the room. All
six ‘supermajors’ attended, alongside Japanese stakeholders, banks and
engineering project leaders, with executive representatives – including
country presidents – from Shell, Chevron, ExxonMobil, BP, Total,
ConocoPhillips, plus Tokyo Gas, JERA, Mitsui, Mitsubishi, JAPEX,
Bechtel, KOGAS, KBR, WorleyParsons, Macquarie and many others.
What emerged from the discussions – and from the headache of
trying to pick from more than 800 company applications to deliver
Tokyo - leading global gas and LNG professionals approve
the final conference agenda for Gastech 2017
Offshore LNG | November/December 2016 www.lngworldshipping.com
presentations – was an outstanding conference agenda comprising of
nearly 200 speakers covering all technical and commercial aspects of
the gas and LNG value chain.
The group decided that it was critical to try and understand where
the gas industry was headed to in times of tighter economics, and
increased obligation towards lowering carbon emissions. They wanted
the agenda to examine where new opportunities and frontiers lay, and
what was needed to help encourage investor confidence in new gas
and LNG projects. The programme will also cover the critical and
pressing issues impacting key customers (particularly Japanese and
north Asian consumers) in terms of their LNG contracts, agreements,
and the prices they pay. Our Japanese hosts were keen to ensure that
Gastech Japan will deliver an international and yet nationally-focused
agenda that gets to the heart of what matters most to executives
working in challenging, uncertain yet exciting times for natural gas.
From a technical conference perspective, there’s never been a
larger variety of subjects covered and the meetings helped to draw out
the very best papers and case studies from a hugely-diverse range of
companies. Japan too was exceptionally well-represented with speakers
and Gastech will showcase more than 50 presentations from nearly 30
of Japan’s most influential companies operating in the gas and LNG
sectors. Demonstrating expertise in cryogenics, processing, shipping
and ship design, innovations in clean technology and carbon capture
and storage, plus a wealth of operational and HSE presentations to
choose from, the event is going to be an essential addition to any
industry professional’s calendar for 2017.
Written by Gavin Sutcliffe, Conference Director, Gastech
Hear from Outstanding Speakers
& Leadership Panels
The world’s strongest speaker line-up in 2017 arrives in Japan

Patrick Pouyanné Ryan M. Lance Peter Coleman Maarten Wetselaar

Chairman & Chairman & Chief Executive Officer & Integrated Gas &
Chief Executive Officer Chief Executive Officer Managing Director New Energies Director
Total ConocoPhillips Woodside Energy Royal Dutch Shell

Michael K. Wirth Robert S. Franklin Khalid bin Khalifa Al-Thani Charif Souki
Executive Vice President President Chief Executive Officer Chairman
Midstream & Development Gas & Power Marketing Qatargas Tellurian Investments Inc.
Chevron ExxonMobil

Shogo Shibuya Jack A. Fusco Mary Hemmingsen Nobuo Tanaka

President & President & Global Head of LNG Chairman
Chief Executive Officer Chief Executive KPMG Japan Gastech Consortium
Chiyoda Corporation Cheniere Energy Inc. Former Executive Director
International Energy Agency

An unmissable opportunity to hear thought-leading

Organised by:
perspectives on the global gas and LNG value chain.
Find out more on www.gastechevent.com/lngws5
FREE ACCESS
TO TECHNICAL DOCUMENTATION FOR
MARINE & OFFSHORE PROFESSIONALS

Take advantage of the Maritime Technology Knowledge Bank.

• A unique, free to access resource for the global shipping industry

• Access whitepapers and technical documentation covering every
aspect of maritime technology, equipment and new products.

www.lngworldshipping.com/knowledgebank
Offshore LNG supplement SOLUTIONS | 15
KANFER SEEKS BACKERS
FOR TWO-BARGE OFFSHORE
LNG PROJECT
The Tønsberg-based start-up
seeks US$1.5 million to go live
with its groundbreaking floating
LNG concept based on two barges
and a tug. Karen Thomas reports
N
orway-based Kanfer Shipping has built on the US
concept of articulated tug barges (ATBs), in which
one tug and one barge work like a conventional small-
scale LNG vessel. However, it has taken the idea one
step further, proposing one barge as a storage unit and a second for
loading or delivering LNG.
The first barge connects landside to discharge natural gas or
LNG; the second replaces it when empty. A tug connected to the
LNG source moves the barges to maintain buffer capacity.
Kanfer has developed a patented design for ATBs to operate in
rough weather while loaded with LNG. It has now invited shipyards
to quote on the designs and conducted trials that, it says, prove the
concept to be robust, seaworthy and competitive in terms of capital
and operating expenditure.
The concept features dual-fuel tugs and LNG storage and supply
barges of 2,000m³-20,000m³. A two-barge offshore LNG solution
offers transport, floating storage and, potentially, regasification.
It can serve smaller power stations, power-intensive industries
and pipeline systems, and offer bunkering to marine industry clients.
This is significantly cheaper than the conventional solution of
shipping to an onshore small scale terminal, says managing partner
Stig Anders Hagen.
Mr Hagen estimates that the cost of a solution based on two
7,000m³-8,000m³ barges and a tug will come in at US$50-60
million. “We have reason to believe that this is similar in price to the
Bomin Linde bunker ship that is about to be constructed,” he says.
Kanfer believes its barge-based solution also delivers a fresh
www.lngworldshipping.com Offshore LNG | November/December 2016
approach to offshore LNG. “The ability to move such barges around
a country – or even a continent – offers considerably more flexibility
and less financial risk, as it allows you to move around to find and
meet demand,” Mr Hagen says.
Speaking on the fringes of SMM in Hamburg this autumn, Mr
Hagen told LNG World Shipping that Kanfer has signed letters of
intent in Europe, the Caribbean and South America.
Its first project will reach a final investment decision in the
first quarter of next year. If all goes to plan, the company hopes to
charter out its solution for up to 10 to 15 years.
In Europe, Kanfer is working with Swedegas, which wants to
develop gas supply, an import terminal and storage infrastructure
at Gävle, north of Stockholm. Kanfer is working on a front-end
engineering design (FEED) study for the project.
Kanfer is also working with GasEner in the Dominican Republic
to produce a case study to provide turnkey logistics solutions for
Caribbean power plants and power intensive industries. It concluded
that to serve a client with an annual demand of 200,000 mt LNG
some 500 miles from the LNG source will require a 5,000m³ barge
and that transport and storage will cost about US$1/mmBtu.
Scaled-down versions of existing LNG-carrier and storage
solutions will not work in small markets with tight budgets, Mr
Hagen argues. ATBs are ideal for island nations like Indonesia and
the Caribbean, which rely for power generation on polluting diesel
or fuel oil – and whose ability to switch to cleaner fuels is hampered
by shortages of infrastructure and under-investment.
He highlights research by Clarksons that suggests that small-
scale LNG demand will support six to eight new small-scale LNG
carriers a year from 2018.
“That might look speculative now,” he concludes. “We believe
these vessels are already a serious consideration. In a market like
the Caribbean, our solution could deliver gas to several island
markets. You could serve a market like the Caribbean with LNG
from Trinidad & Tobago, Dominican Republic, Jamaica or even
from the US.
“Our focus is less on bunker-supply barges than on delivering
LNG to power stations however we are involved in bunker projects
where we have a highly attractive solution. The world’s shipyards
are also pretty desperate for new orders now. We think this is good
timing when it comes to ordering an LNG ATB solution.” LNG
16 | VIEWPOINT Offshore LNG supplement
COULD FLNG
AND FLARE GAS
JOIN FORCES?
H
ow much gas is flared or vented
from oil and gas fields depends
on a facility’s capacity and the
field’s remoteness – but the
amounts are massive.
The World Bank’s Global Gas Flaring
Reduction Partnership (GGFR) claims that
converting gas wasted through venting into
electricity would produce enough power for Africa.
At its highest levels, flaring and venting
is equivalent to quarter of the annual natural
gas consumption of the US and 30 per cent of
that of the European Union.
Brought to market at a rate of US$5.62/
1,000ft³, this gas would be worth US$29.8 billion.
Steve Jones That kind of money could be better reinvested in
aiding energy supply where it is needed.
We are wasting huge resources, due to
safety protocols, or because it is not efficient
to capture, store and transport this gas to
market at current prices. This is particularly
true for remote oil and gas fields.
Under climate goals agreed at COP21
in Paris, US president Barack Obama and
Canada’s prime minister Justin Trudeau have
signed up to the World Bank goal to end
routine flaring by 2030. Governments now
face the problem of how to achieve that target
within 14 years
If it was simple to convert the wasted
resource into profits, no doubt the market would
do so – so could LNG offer a viable solution?
Reports say a deal is being brokered
to convert Iranian flare gas into LNG on
a floating vessel. Floating LNG (FLNG)
has had mixed fortunes of late, but it could
provide an exciting and lucrative opportunity.
Lanner’s experience simulating proposed
FLNG projects shows that investors will
not proceed without thorough, evidence-
based analysis and proven results – a natural
response to the risks involved.
Offshore LNG | November/December 2016 www.lngworldshipping.com
Although Inpex’s and Shell’s Abadi FLNG
moved on shore this summer to boost jobs and
save costs, the long-term trend is likely to favour
floating units, which offer shorter lead times and
re-use potential, overcoming difficulties securing
space for new projects onshore.
Lanner has simulated specific scenarios
and constraints applicable to floating units
for specific projects. We have also carried out
simulation and predictive modelling to answer
more general questions facing liquefaction
terminals, such as how train maintenance affects
schedules and how weather can disrupt loading.
We have simulated floating units that have
constraints around storage, not just in the case of
LNG but also condensate, as space is at a premium.
Another example of our analysis is the
effect on operations of longer connection
times due to an LNG carrier’s careful
approach to the floating unit, when both
may be moving, and the effect on connection
operations to sensitivity in weather conditions.
Converting flared gas into LNG faces
several hurdles – and there are cheaper sources
of gas in the shale fields of the US and Canada.
But Iran’s keenness to enter the LNG
market makes it a good test of the flare-
gas-to-LNG proposition, given the political
hurdles around pipelines. Governments that
wish to use this valuable resource – rather
than waste it – would do well to study how to
remove the barriers and help LNG players to
get started.
So could FLNG projects convert flare gas
into electricity and gas for our homes and help
nations reach their climate targets sooner by
displacing high-carbon alternatives?
We will have to wait and see – but the
possibility is up for debate and on the table. LNG
Steve Jones is a consultant at the Lanner Group