FSRUs a better bet than LNG carriers, says Drewry

Despite a decline in rates since 2013-15 – from around USD 120-130,000 a day to around USD 100,000 – Drewry calculates the rate of return on a USD 250 million FSRU over 20 years to be 16% at this rate level. This compares with a return of 13% on a new LNG carrier costing USD185 million and deployed on a long-term charter at USD 70,000 a day.
Drewry notes that the size of the global FSRU fleet has increased at a compound annual growth rate of 21% over the last five years. There are now 24 FSRUs in operation with total import capacity of 82 million tonnes per annum (mtpa). A further 74 mtpa of import capacity is either under construction or in the planning stage, according to the analyst.  
The number of FSRUs is growing rapidly because of advantages over land-based terminals including lower cost, shorter time to commissioning and more flexibility with regard to location. However, new entrants have arrived in the FSRU sector, leading to a softening day rates. These are also under pressure because owners of old LNG carriers are active in the market, looking for conversion opportunities.