$126 Billion Investment in new Floating Production Units
David Sheret
Co-Founder of Archer Knight. Offshore Energy Transition Sensibility Evangelist.
From 2025-2029, Energy Maritime Associates (EMA) expects orders for 119 Floating Production Systems, with a capital cost of $126 billion, in its mid-case forecast. Over 70% of this investment would go towards the 54 FPSOs. Brazil will remain the largest FPSO market, surpassing Africa and the rest of South America combined. Newbuilt hulls will be the norm going forward, although converted tankers and the re-use of existing FPSOs will play a role, particularly for smaller developments.
Floating LNG export projects worth $14.3 billion are expected in Africa, Argentina, and the Mediterranean. These will also mostly consist of newbuilt units, with a select few conversions and redeployments. Floating LNG import projects worth $6.3 billion are forecast predominantly for Europe and South America. This FSRU demand will be met by a combination of newbuildings, conversion of older LNG carriers, and redeployment of existing units.
Production Semisubmersibles will continue to be popular for deepwater developments on both sides of the Gulf of Mexico as well as in China. Costs for these Semis have been driven down by repeat orders of a standardised design, such as for Shell’s Vito, Whale, and Sparta. Industry capacity continues to be constrained due to high demand for traditional shipbuilding, as well as 60 floating production and storage systems currently on order. Finance remains the largest constraint for these multi-billion-dollar units. As a result, fewer lease contracts will be awarded, in favour of EPC or Build-Operate-Transfer (BOT) contracts. However, the BOT period is expected to be 5-7 years, rather than the two years seen in past awards.
Further details are included in the 200+ page Floating Production Outlook Report 2025-2029, which covers:
According to EMA’s Managing Director, David Sheret : "Despite rising costs and geo-political uncertainty, the fundamentals of the floating production sector remain strong with a large number of developments in the planning pipeline. Offshore developments, particularly in deepwater, will remain attractive investments as they can offer a low cost per barrel and low CO2 per barrel. While mature areas, such as the UK North Sea, are in decline, additional developments will continue in established regions including the Gulf of Mexico, Brazil, and West Africa. In addition, developments in new frontier regions like Suriname and Namibia will require additional units. The biggest constraint is financing, particularly for leased assets. However, there are sources of capital available and interested in the long-term, infrastructure nature of floating production contracts, including bonds and private equity.”
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About EMA
Energy Maritime Associates Pte Ltd , part of the Archer Knight (Holdings) Limited Group, is the leading authority on the floating production market, providing independent data and consulting services.
Client Feedback
Thanks David, your point about the existing assets is well made, especially in the current context of the energy transition. The 77 FPSOs set for decommissioning present a unique opportunity to innovate through reuse. Pivotree (Australia)’s technology enables select units to be repurposed for small-field development, offering a repeatable and cost-efficient solution. Let’s turn decommissioning challenges into opportunities for more sustainable growth.