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The floating LNG power vessel market is expected to rise at a CAGR of more than 2% during the forecast period of 2020-2025. Factors such as increasing demand for power due to increasing population, along with the lack of proper power infrastructures in developing countries, are likely to drive the floating LNG power vessel market. However, high volatile and uneven LNG prices are expected to restrain the floating LNG power vessel market.
- The power barge segment, due to its less cost of production than power ships, is expected to be the largest segment and is likely to dominate the floating LNG power vessel market.
- Regions such as Asia-Pacific and Middle-East and Africa are using a large piece of their land resources for the other energy sources such as solar and wind till 2025. However, the usage of land is expected to consume a considerable portion of the land. The countries in the region due to a significant share of oceans and seas are expected to descend towards the floating LNG power market in the future.
- Asia-Pacific held a significant market share and is expected to be the largest and the fastest market during the forecast period. As of 2018, only Japan’s LNG imports are 113 billion cubic metres (bcm) being highest in the world. The country’s increasing energy demand along with large population with limited land is seen by many investors in the country as an opportunity for LNG power vessel, due to which a significant amount of investment is used for the development of floating LNG power vessels.
Key Market Trends
Power Barge Segment Expected to Dominate the Market
- Power Barge is a power plant facility installed on the flat floating structures. Unlike power ships, barge doesn’t have a self-propelled system for moving from one location to the other, which cuts the cost of production for barges.
- As these power barges do not have any self-propelled moving systems, they are moved by other small boats or ships. The space saved from the propulsion engines in barges is used for more installation capacity of the power plant.
- As of 2018, the global import of LNG for the countries was 431 billion cubic metres (bcm), which was higher than the worldwide import of 393.9 billion cubic metres (bcm) in 2017. The increase in the use of LNG has triggered the development of floating LNG power vessel and has attracted many global investors who see this as a great and unique way to generate power.
- In 2019, the first operation of two prototypes units of the mobile shore power solution of Becker Marine Systems was operated at Hamburg. The two LNG power barge units have a total power generation capacity of 3 megawatts (MW).
- Hence, owing to the above points, the power barge segment is likely to dominate the floating LNG power vessel market during the forecast period.
Asia-Pacific Expected to Dominate the Market
- Asia-Pacific region, having the largest population, is expected to grow in the coming years, and is likely going to require more energy and resources. The government of developing countries such as China and India are continually working to fill the energy gap in their respective countries.
- For countries such as Indonesia, Myanmar, and Singapore, which have a limited area of land and are mostly surrounded by water, floating LNG power vessels are tremendously beneficial as they can be easily moved to the place requiring energy.
- Many countries in the region are leasing floating LNG power vessels for several years for the area where either power infrastructures are complicated or have harsh geography and lack of investment.
- In 2019, Kawasaki Heavy Industries Ltd obtained approval in principle from world-leading ship classification organization DNV GL for its liquefied natural gas (LNG) floating power plant equipped with its own gas turbine. Kawasaki came up with two models for the power plant, including the gas engine model and combined cycle power plant (CCPP) model. The plant is installed on the barge and is expected to have a power output of 80 megawatts (MW) for the CCPP model and 30 megawatts (MW) for the gas engine model.
- Wison Engineering Services Co Ltd, a significant company in offshore infrastructures, in 2017 signed a five year contract with Shanghai Electric Power Generation Group for the development of the small to medium scale floating LNG power generation barge. The project is expected to be complete by 2022.
- Hence, owing to the above points, Asia-Pacific is expected to dominate the floating LNG power vessel market during the forecast period.
The floating LNG power vessel market is moderately consolidated. Some of the key players in this market include Wison Engineering Services Co Ltd, Kawasaki Heavy Industries Ltd, Wartsila Oyj Abp, Chiyoda Corp, and Karadeniz Holding.
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