TechnipFMC forecasts a strong period of offshore growth up to 2025, with greater spending on deep-water in the second half of the decade, along with increased growth in its services and energy transition business over the long term.
The UK-headquartered contractor “is confident it is entering into an upcycle that is bullish for oil and gas”, according to its president of subsea, Jonathan Landes.
At TechnipFMC's annual investor day on Tuesday, Landes added that “beyond the anticipated increase in project activity, we believe this cycle will also see more tie back activity than in previous cycles and TechnipFMC will benefit from our installed base of subsea equipment”.
The energy transition will follow this upcycle, creating an expansion in carbon capture and sequestration (CCS) opportunities as oil and gas volumes begin to plateau, he noted.
“Growth in renewable offshore resources coupled with hydrogen storage opportunities will accelerate to meet increasing demand. Ultimately, we will see a new normal emerge with the continuing shift in the supply mix,” Landes said.
“Offshore and subsea will be the next frontier for the energy transition. Wind wave, tidal and hydrogen will become well established, driven by the continued development of new technologies and systems.”
Room to grow
TechnipFMC believes there is potential for subsea inbound orders to approach $8 billion, including subsea services which is expected to reach $1.1 billion in 2021 and predicts additional growth of about 35% through 2025.
“This growth will be driven by many factors,” Landes said. “First is market growth, which is currently estimated at 5% annualised rate through 2025, supported in part by the deep-water capex trends. We expect this will drive growth in our core services activities, specifically installation and maintenance, that follow subsea project awards.”
In addition, the company has extended beyond its core market with products like its Gemini remotely operated underwater vehicle system, with a depth rating of 4000 metres. The system integrates more than 30 subsea exchangeable tools with automated subsea robotics and can remain subsea for one month without recovery for reconfiguration of its tooling.
The company’s first two Gemini systems were successfully deployed over the past year with Shell, resulting in contract awards for three additional systems to be fully mobilised by the end of the year, Landes noted.
Energy transition roadmap
Specific to the energy transition, TechnipFMC sees a total addressable market for carbon transportation and storage and novel offshore energy of $80 billion by 2030, with $1 billion of targeted inbound orders related to these market opportunities through 2025.
Near-term opportunities are focused on the transportation and storage of carbon dioxide.
TechnipFMC entered into a long-term strategic alliance with US independent Talos Energy to develop and deliver “technical and commercial solutions” to CCS projects along the US Gulf Coast.
The first project for the alliance is the CCS project announced Monday between Talos Energy, Storegga and Freeport LNG. TechnipFMC chief executive Doug Pferdehirt enthusiastically confirming during the analyst day that TechnipFMC is part of the project.
In addition to CO2 transportation and storage, other major energy transition categories where it sees it can utilise its offshore expertise include floating renewables like wind, wave and tidal applications, and hydrogen.
Energy transition projects cited in the day’s presentation include its Deep Purple green hydrogen offshore energy system. This uses offshore wind energy to produce hydrogen from seawater that can then be stored subsea for later use to provide energy on demand.
The system, in development for several years now, will enter full-scale validation testing during a pilot project off the coast of the Canary Islands next year.