Offshore vs. Onshore Terminals - The Advantages & The Disadvantages

Brian Songhurst, E+P Consulting

This paper was presented at the Annual Conference held in Berlin 4 - 25 May 2012

Onshore LNG import terminals have been the norm until recently when floating storage and regasification terminals (FSRUs) have become popular. The first FSRU commenced operation in the Gulf of Mexico in 2005 and there are now 10 units in operation around the world. A further five are under development and others planned.

FSRUs can typically be developed at half the capital cost and delivered in half the time of onshore terminals thereby improving project profitability by a considerable margin. There is also the option to lease on a day rate basis improving project cash flow and less demanding environmental impact issues. They also offer the advantage of early gas prior to development of a longer term onshore terminal as well the ability to relocate to different regions and capture the prize of peak load markets. However there are drawbacks in terms of throughput and storage limitations per vessel, possible unloading constraints due to weather and sea states, minimal local content, vessel life expectancy, possible high leasing rates, lack of space for nitrogen ballasting  etc.

The paper will present the advantages and disadvantages and provide a road map for screening the options for a particular project to determine whether a FSRU or onshore terminal delivers the best option. The paper will include a case study. It should be recognised that no one solution fits all the project requirements all of the time and the feasibility and conceptual design phase is the time to evaluate the options.