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SINGAPORE SHIPREPAIRING, SHIPBUILDING & OFFSHORE INDUSTRIES DIRECTORY 2020/2021
FPSO for a project in India. Keppel O&M, through its wholly-owned subsidiary Keppel Shipyard Ltd, secured contracts for the modi cation and upgrading of FPSO. One of the contracts, entered into with Yinson Nepeta Production, involves the fast-track modi cation and upgrading of FPSO Allan. In the same period, Keppel Shipyard delivered FPSO Abigail-Joseph, its 134th FPSO project and the world’s fastest brown eld FPSO vessel modi cation and upgrading project, also to Yinson.
FPSOs have proven themselves adaptable and resilient during times of uctuating market conditions due to its economic and operational advantages. In the aftermath of COVID-19, market dynamics may be more supportive of scaled-down developments, such as smaller FPSO vessels and conversions.
GAINING WITH GAS PROJECTS
Driven by rising costs of onshore lique ed natural gas (LNG) terminals, investments in
the global oating lique ed natural gas (FLNG) arena is expected to grow. Asia-Paci c, in particular, is poised to draw a majority of investments in the FLNG sector with its sizeable line-up of regasi cation and liquefaction projects. Pro table opportunities have emerged as the use of oating liquefaction facilities gains traction. At the same time, oating storage and regasi cation units (FSRUs), acting as game- changers in the opening of new gas markets, have also attracted keen interest from investors.
Companies have been responsive to this uptrend. The success of Hilli Episeyo, the world’s rst converted vessel on the list of biggest FLNG tankers developed by Keppel Shipyard, is a visible milestone. In 2019, Keppel also secured a project to convert LNG carrier Gimi into a FLNG vessel.
Floating LNG terminals have also been gaining market share as they have a number of advantages over land terminals. Most of the
FSRUs in service are essentially standard LNG carriers tted with a modular regasi cation plant. This growth has bene ted the major local shipyards. In 2019, Sembmarine added three new gas projects to its portfolio. These included the conversion of the LNG tanker Dwiputra into a FSRU, conversion of LNG carrier Flora into a oating storage unit (FSU) and upgrading works on FSRU BW Magna.
The LNG market started 2020 with depressed prices due to weaker-than-expected demand growth in Asia. The pandemic further weighs on the market. Both the oil and LNG markets are facing oversupply and demand concerns. Weakness in gas demand will reduce the number of LNG-related projects, including FLNG conversion and the development of LNG regasi cation infrastructure. However, as oil and gas majors retain their focus on reducing the carbon footprint of their business portfolios, gas will play a key role alongside renewables, in helping to meet future lower-carbon energy requirements. Companies offering FLNG and FSRU solutions may see further growth as the offshore gas industry continues to seek new innovations in facility design, operating models and contracting strategies to maintain or improve operating margins.
BONANZA YEAR FOR RETROFITTING
The IMO 2020 requirements on the sulphur content of marine fuel and the standards set out by the Ballast Water Management Convention brought good opportunities to shipyards. In the period 2018-19, industry majors received considerable number of orders for ballast water management systems and gas scrubber units, with some to be completed in 2020. This opportunity provided some respite to shipyards ghting the doldrums.
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