The Strategic Significance of FSRUs in Today’s Global Economy

By A. Dimitriou

Introduction

Floating Storage and Regasification Units (FSRUs) have emerged as a cornerstone of the global liquefied natural gas (LNG) supply chain. As the world pivots towards cleaner energy and seeks to enhance energy security, FSRUs offer a flexible, rapid, and cost-effective solution for importing LNG. Their role has become even more critical in the wake of geopolitical shifts, such as the Russian invasion of Ukraine, which has accelerated Europe’s efforts to diversify away from Russian gas. This article examines the economic significance of FSRUs, their technical characteristics, the current and projected fleet size, and their pivotal role in facilitating U.S. LNG exports and supporting sanctions on Russian LNG.

What Is an FSRU? General Particulars and Technical Features

An FSRU is a specialised vessel that combines LNG storage and regasification. Unlike traditional onshore LNG terminals, FSRUs are floating and mobile, and can be deployed at coastal or offshore locations. Here are the key particulars:

• Storage Capacity: Most modern FSRUs have a storage capacity of approximately 170,000 cubic metres of LNG, comparable to that of the largest LNG carriers. Some units are smaller (10,000–15,000 m³), while others exceed 170,000 m³.
• Regasification Rate: FSRUs can regasify LNG at rates ranging from 500 million to over 1,200 million standard cubic feet per day (MMscf/d), delivering natural gas directly into local pipelines or power plants.
• Configurations: FSRUs may be purpose-built or converted from existing LNG carriers. They can be self-propelled or stationary, moored at quayside, near-shore, or offshore using advanced mooring systems.
• Cost and Deployment: Building an FSRU typically costs under $300 million and takes 18–24 months, compared to $400 million and 4–7 years for a land-based terminal.
• Flexibility: FSRUs can be relocated, repurposed, or even used as conventional LNG carriers if market conditions change.

The Economic Significance of FSRUs

1. Rapid Response to Energy Crises

FSRUs have proven invaluable in responding to sudden shifts in energy demand and supply. Following the Russian invasion of Ukraine, European countries urgently needed to replace pipeline gas from Russia. FSRUs provided a rapid solution, with 10 new units deployed in Europe within 18 months, thereby increasing regasification capacity by 32%. Germany’s Wilhelmshaven FSRU, for example, was operational in just 18 months, saving years compared to building a land terminal.

2. Cost-Effective and Scalable Infrastructure

FSRUs offer a lower capital investment and faster deployment than onshore terminals. This is especially critical for emerging economies or regions with budgetary constraints. For instance, Ghana’s Tema LNG project used an FSRU to deliver 250 million standard cubic feet of gas daily at a fraction of the cost of a fixed terminal.

3. Flexibility and Mobility

FSRUs can be redeployed to different locations as market needs evolve. This mobility allows countries to address seasonal demand fluctuations, such as Argentina’s use of FSRUs to manage winter gas demand or Japan’s to balance summer power needs.

4. Supporting Decarbonisation and Energy Transition

As nations commit to reducing carbon emissions, FSRUs enable a swift transition from coal and oil to cleaner-burning natural gas. Over 50 countries now include LNG in their climate commitments, and FSRUs are central to meeting these targets.

FSRU Market Growth: Fleet Size and Trends

The global FSRU market is experiencing robust growth, driven by rising LNG demand and the need for flexible import solutions. Here are the latest figures:

• Fleet Size: As of late 2025, approximately 53 FSRUs are in operation worldwide, comprising both newbuilds and conversions.
• Under Construction: 18 new FSRU projects are under construction, with another 32 in the planning phase, expected to bring the global fleet to over 70 units by 2026.
• Capacity: The total FSRU-based regasification capacity in Europe alone is projected to reach 100 million tonnes per annum (mtpa) by the end of this decade.
• Regional Leaders: South Korean, Singaporean, and Chinese shipyards dominate FSRU construction, with major operators including Excelerate Energy, Höegh LNG, and Golar LNG.

FSRUs and the US LNG Export Boom

The United States has rapidly become the world’s leading LNG exporter, with FSRUs playing a crucial role in delivering US LNG to global markets, especially Europe.

• US to Europe: In the first quarter of 2022, 74% of US LNG exports went to Europe, up from 34% the previous year. This surge was enabled by the rapid deployment of FSRUs at European ports, which allowed for immediate increases in import capacity.
• Bridging the Gap: FSRUs have been described as a “bridge” solution, enabling Europe to replace Russian pipeline gas with US LNG while longer-term infrastructure is developed.
• Market Flexibility: The agility of FSRUs allows Europe to capitalise on cheaper US LNG supplies and respond quickly to market changes, supporting both energy security and price stability.

FSRUs and the Ban on Russian LNG

The geopolitical landscape has made FSRUs a strategic asset in enforcing sanctions and reducing reliance on Russian gas:

• Sanctions and Diversification: Following the Russian invasion of Ukraine, Europe accelerated efforts to ban Russian LNG and pipeline gas. FSRUs enabled countries to diversify import sources rapidly, with 85% of new regasification capacity since 2022 being FSRU-based.
• Energy Security: FSRUs provide a “plug-and-play” solution, allowing countries to quickly ramp up LNG imports from alternative suppliers, including the US, Qatar, and others.
• Legal and Contractual Flexibility: The mobility of FSRUs allows for the relocation of assets as needed, supporting the enforcement of sanctions and the redirection of LNG flows away from sanctioned sources.

Technological and Environmental Innovations

FSRUs are at the forefront of technological innovation in the LNG sector:

• Advanced Regasification: Modern FSRUs feature high-efficiency vaporizers, waste heat recovery systems, and digital monitoring for optimal performance.
• Environmental Compliance: New designs minimise emissions, manage ballast water, and reduce flaring, supporting global decarbonisation goals.
• Operational Versatility: FSRUs can serve as regional LNG hubs, reload LNG onto smaller vessels, or provide bunkering for LNG-powered ships.

Conclusion

FSRUs have become indispensable to the modern energy economy. Their ability to provide rapid, flexible, and cost-effective LNG import solutions has transformed the global gas market, enabling countries to enhance energy security, support decarbonisation, and respond to geopolitical challenges. With over 50 units in operation, dozens more under construction, and a growing role in facilitating US LNG exports and enforcing sanctions on Russian gas, FSRUs are set to remain at the heart of the world’s energy transition for years to come.

References:

• FSRU market thrives amid robust LNG demand growth – Drewry
• LNG Exports to Europe: What Are Floating Storage Regasification Units (FSRUs)? – CRS
• Upcoming FSRU Projects 2025 – FSRU Asia Summit
• Floating Storage Regasification Unit (FSRU) – Excelerate Energy
• A Bridge Over Troubled Water: LNG FSRUs Can Enhance European Energy Security – Baker Institute