Bumi Armada has entered the floating LNG lease-and-operate segment, becoming the second major Asian contractor to chase the charter model for offshore gas liquefaction, alongside China's Wison.

Splash 24/7 reported the move, which positions the Malaysian FPSO specialist against Wison's existing FLNG newbuilding programme in a niche that has so far drawn few commercial competitors.

What does the lease-and-operate model change for gas developers?

Under the structure, the contractor finances, builds, owns and operates the FLNG vessel, then charters it to the field operator for a multi-year term. For mid-sized fields unable to support a dedicated facility, this shifts a large capex item off the operator's balance sheet and replaces it with an opex-style commitment.

• The contractor carries construction and execution risk
• Day rates or throughput fees replace upfront capex
• Time from final investment decision to first cargo can compress by 12-24 months
• Off-spec or stranded gas can be monetised without a tailored facility

Wison has been marketing its lease-and-operate offer to LNG buyers and national oil companies exploring stranded and marginal gas resources. The Chinese group has invested in standardised FLNG designs targeting smaller capacity ranges than the gigaprojects that defined the first wave of floating liquefaction.

Where does Bumi Armada fit in the FLNG contest?

The Malaysian operator brings an established FPSO fleet and offshore execution capability to the FLNG segment. Its experience with turret-moored production, gas handling and operations overlaps directly with the upstream requirements of a floating LNG vessel, particularly on the gas-receipt and pre-treatment side of the liquefaction train.

The move signals that FLNG is being treated as an extension of the FPSO business model by contractors already operating in adjacent offshore segments. Lease-and-operate FPSOs have been a mainstay of the deepwater production sector for two decades; FLNG appears to be following a similar contracting trajectory.

What comes next for the segment?

The FLNG segment has produced a limited number of commercial deployments. Shell's Prelude FLNG has operated off Australia since 2018, while the converted Hilli Episeyo has produced LNG from offshore Cameroon since 2018. Both vessels operate under bespoke ownership or contractor financing structures rather than the lease-and-operate template now being marketed by Wison and Bumi Armada.

The watch items for the segment:

• Bumi Armada's first FLNG charter contract award
• Any FID on a lease-and-operate FLNG project in 2025-2026
• Tenders in West Africa, Southeast Asia, the Mediterranean and offshore Australia where mid-scale FLNG capacity is under study
• Pricing competition between Asian contractors chasing the same lease-and-operate briefs

Lease-and-operate FLNG remains unproven at commercial scale. Until a project reaches FID under this structure, the model is more of a commercial positioning exercise than an established market segment. The arrival of a second major Asian contractor suggests that both groups expect the first FID to come within a planning horizon worth committing now.