Over the past year, we have seen an increase in orders for floating generation and storage systems after many years of low activity. According to our colleagues at World Energy Reports, “Global oil and natural gas markets are facing a rebound in energy demand on top of supply disruptions caused by Russia’s invasion of Ukraine. As a result, activity and the business climate in the floating generation sector have rarely been stronger. This increased activity in the floating generation and storage segment has a direct impact on the demand for OSV.


Today, there are on average over 700 OSVs providing long-term support to floating production and offloading systems around the world. Depending on daily activity, the number of active OSVs can exceed 1,000 units and also fall below 375 ships.

Our baseline forecast is that approximately 425 additional OSVs will be required to support the floating production and offloading systems currently ordered and planned.

Around 360 floating production and storage systems installed worldwide and nearly 200 on order or planned

Although we follow other floating systems, including floating LNG regasification units (FSRUs), this article focuses on five floating production and storage segments – floating production, storage and offloading units or FPSOs , floating LNG production, storage and offloading units or FLNG, floating production units without storage or FPU, floating storage units or FSO and floating LNG storage units or FSU LNG.

Appendix 1 summarizes the historical evolution of the market which reached almost 360 units installed at the end of May this year and the expected evolution of the sector based on current orders and activity planned.


Source: Intelatus Global Partners


About 47% of installed systems are FPSOs, by far the largest segment. Brazil is currently the largest market for FPSOs with 48 units installed. The influence of FPSOs becomes more pronounced when looking to the future. FPSOs represent more than 60% of all floating and production systems on order and nearly 70% of planned units.

The FLNG segment is in the early stages of its development journey. There are currently five operational units worldwide. But in the future, the segment becomes the second most promising segment after FPSOs. The FLNG segment represents 26 units ordered and planned, or 13% of the total.

The second largest segment is that of floating production units without storage which covers semi-submersibles, TLPs, spars and barges. There are currently over 95 units installed worldwide, 50 of which are installed in the Gulf of Mexico. Of the 19 FPUs ordered or planned, eight will be deployed in the Gulf of Mexico and three in Australia.

FSOs now account for nearly 85 units installed, with FSO deliveries slowing of late. 15 FSOs are currently planned or on order.
Like the FLNG segment, the FSU LNG segment is relatively small with six units currently operational. We expect the segment to double in the coming years with six additional units planned or on order.

What are the opportunities for VSOs?

At a high level, OSV opportunities in the floating generation and storage segment can be grouped into three activities: unit relocation, installation support, and long-term production support. term.

While units are deployed around the world, hulls are often built or converted in Asian yards. Going down in the FPSO segment, about 150 hulls were moved from Singapore, China and South Korea. The United Arab Emirates, Malaysia and Brazil are players in smaller but important projects. In other segments, Singapore and China represent the largest origin for FSO hull tows and Singapore and South Korea for FSU LNG hull tows. For FPUs, South Korea is the first semi-sub and TLP origin and Finland historically for spars.

By far the most popular means of moving a floating production system is wet towing with large ocean tugs. Dry towing and self-propulsion remain an option and large heavy lift vessels have been deployed to move the floating production hulls. However, there remains a limited choice of suitable heavy lift ships, especially for larger units.

Our analysis indicates that wet towing activity typically requires two to three 200 ± ton main tugs with bollard pull. Escort tugs may also be deployed. Exhibit 2 shows our analysis of tugs that deployed to move FPSOs.


Source: Intelatus Global Partners


When analyzing the movement of semi-submersibles, the largest of the FPU sub-segments, we note an average of two tugs ranging from 200 to 340 tons of traction for units with a processing capacity of 100,000 barrels per day .

Before a floating production system arrives on site, the mooring systems will have already been pre-laid by very large AHTS and offshore construction vessels.

Once the floating production system arrives on site, the tugs that brought the unit to site are often used to take over heading control during tie-in work as well as disconnect work when the unit leaves the field. In the case of FPSOs, FLNGs and FSOs, this may require up to five large tugs. Smaller OSVs are often deployed for logistics support and security, firefighting and/or pollution response.

  • Long term operational support

Depending on the customer and location, in terms of long-term support, OSVs can be dedicated to the floating production system or when a customer supports a significant amount of offshore infrastructure, such as Petrobras in Brazil, some vessels can be shared between several units.
The main activities of OSVs during the production phase of floating production systems cover general procurement and safety, security and environmental control tasks.

For these systems with storage, picking assistance includes piloting, handling of mooring lines and hoses, conveying manifolds, parallel and tandem mooring. Different environmental conditions as well as the size or type of shuttle tankers result in some regional variations in the types of anchor handlers used for floating production systems. As an example, conventional tankers with midship manifolds are more commonly found in Africa, while DP shuttle tankers with bow loading systems have typically, but not exclusively, been deployed in Brazil. Different conditions impact specific picking operations.

Using the largest production and floating storage segment, FPSOs, Appendix 3 summarizes the sizes of anchor handlers and PSVs deployed in long-term support operations by major region.


Source: Intelatus Global Partners


Brazil and Africa are the largest FPSO markets for OSVs. Of note is the concentration of large anchor handlers in Brazil of around 150 to around 210 ton bollard pull, while the size distribution found in the large African market is significantly wider. For PSVs, there is less of a clear correlation between the size of the vessel and the storage or processing capabilities of the FPSO. At a high level we can say that PSVs over 3,000-5,000 dwt are used for FPSO support, usually in large markets like Africa and Brazil. Other OSVs are often deployed for safety, fire and/or pollution control.

What is the opportunity for OSVs?

Based on our analysis of existing operational practices and our forecasts of planned and made-to-order floating generation and storage systems, Appendix 4 summarizes our long-term demand forecasts for OSV to support operations.
Our base case identifies a demand of approximately 425 units.


Source: Intelatus Global Partners


Potential for tightness in supply from large anchor handlers Increased exploration and production activity is a trigger for increased utilization of drilling rigs, which is also a trigger for utilization AHT, AHTS and PSV. The OSV fleet was built to support oil and gas activities and with the reactivation of inactive ships and even some new buildings, supply and demand could find some balance.

However, we believe there is a new emerging demand for large anchor handlers for which there is an insufficient supply of vessels – floating offshore wind farms. Pre-commercial floating wind arrays are already being installed and large commercial projects of 500-1000 MW are being planned for installation towards the end of the decade.

Floating wind turbines deploy floating substructures which are usually semi-submersible, spar or TLP designs designed to support the latest generation of wind turbines with a capacity of around 15 MW, which means around 66 wind turbines will be installed on a 1 GW wind farm. Each substructure is moored to the seabed with at least three mooring lines. The largest anchor handlers have been deployed to date to install the mooring, towing and hooking up of floating wind structures. Exhibit 5 summarizes the size of anchor handlers deployed on floating wind projects to date and compares a typical floating wind farm with a typical deep-sea FPSO. An offshore wind farm consumes about five times more mooring line and up to 12 times more anchors than the FPSO project.


Source: Intelatus Global Partners, Equinor


We see the challenge in the 16,000 hp or 200 ton bollard pull anchor handlers and above segments. There are approximately 155-175 active anchor handlers and approximately 40 other decommissioned vessels in this segment. With limited new build activity, there is a potential shortage of supply after mid-decade. This is becoming a driver for a tight market, higher daily rates and new builds, especially for ships with diesel electric, hybrid or fuel cell systems or ships running on low or zero caron fuels.


  • For more information on World Energy Reports Monthly Float Report, please visit www.intelatus.com or contact Michael Kozlowski at +1 561-733-2477 or Philip Lewis at +44 203-966-2492.


About the Author

Philip Lewis is Director of Research at Intelatus Global Partners. He has extensive experience in market analysis and strategic planning in the global energy, maritime and offshore oil and gas sectors. Intelatus Global Partners was born from the merger of International Maritime Associates and World Energy Reports.