Floating liquefied natural gas (FLNG) capacity in the next three years is predicted to more than double globally, as projects on both coasts of Africa and a second Malaysian export facility have been sanctioned for investment, Fitch Solutions said in a report Thursday.

ExxonMobil and Eni SpA’s Coral South FLNG project in Mozambique is particularly significant for the country since it would be the world’s first ultra-deep water FLNG facility, moored in more than 2,000 meters of water, Fitch noted.

The project, sanctioned in June 2017, would produce up to 3.4 million metric tons/year (mmty) starting in 2022. Coral South would produce, liquefy and store gas at sea, while subsea equipment, such as manifolds, subsea trees and flexible risers, would bring the gas to the surface from pockets under the seabed.

Mozambique also has at least two massive LNG projects planned. In June, Houston-based Anadarko Petroleum Corp. and its partners sanctioned the 12.88 mmty Mozambique LNG, an estimated $20 billion onshore project.

The country’s 15 mmty Rovuma LNG facility, another joint venture between a group including ExxonMobil and Eni via the Mozambique Rovuma Venture SpA (MRV) is expected to reach a final investment decision by the end of this year.

The three LNG projects would propel Mozambique to become a leading LNG exporter, giving it export capacity of more than 30 mmty. Australia is the global LNG leader with a liquefaction capacity of 80 mmty, followed by Qatar with 77 mmty.

Malaysia’s second FLNG vessel, PFLNG Dua, is scheduled to enter service in the first quarter of 2020, Fitch said. Petronas’ first FLNG vessel, PFLNG Satu, entered service in 2017 and recently moved 280 miles from Kanowit to its second site in the Kebabangan field. The Malaysian FLNG projects “are particularly notable due to the effectiveness of the FLNG vessels in monetizing fragmented and isolated resource bases around Petronas’ existing production areas,” Fitch noted.

Malaysia, currently the world’s third largest LNG exporter, began importing gas in 2015 from the Santos-led Gladstone LNG (GLNG) project in eastern Australia.

Recently, Thailand’s state-owned PTT Exploration and Production Public Co., aka PTEEP, said it had discovered 2 Tcf offshore Malaysia in the Sarawak SK410B Project. Wood Mackenzie said it was the seventh largest gas find so far this year.

The Greater Tortue project on the Mauritian and Senegalese border that was sanctioned in late 2018 is another key project in the global FLNG pipeline, Fitch said. The project, led by BP plc, is targeting first shipments by 2022.

“Additional discoveries of gas at the Greater Tortue area have further strengthened the business case for the 2.5 mmty development, with total gas reserves in the field now estimated at around 15 Tcf,” Fitch said.

“The main appeal of FLNG projects lies in their combined ability to unlock stranded or technically challenging resource bases, as well as the reduced cost, lead-times and operational risk of larger land-based LNG developments,” Fitch said. “In general, the shorter lead-times for FLNG projects appeals to operators who will see a faster monetization of gas reserves.”

Because vessels are constructed at shipyards, “the local labor cost and permitting issues associated with the construction of shore terminals can be avoided.” Unlike much larger onshore LNG terminals, lower capacity for FLNG developments also means it is less difficult to lock in adequate offtake agreements.

Yet, risks remain for the development of the FLNG vessel sector, including financing difficulties, technical hurdles and the weak outlook for global gas markets in the medium term, Fitch analyst said. They pointed to Royal Dutch Shell plc’s 3.6 mmty Prelude FLNG vessel in Australia, which encountered delays from technical issues leading to significant cost overruns.

Future “supersized FLNG projects are likely to lose out to smaller more flexible FLNG solutions, with costs somewhat more contained than seen with projects the scale of Prelude.”

Smaller FLNG operations have found recent success. In June, Argentina started exporting LNG for the first time in its history. The LNG was produced on Exmar NV’s Tango FLNG barge at the Bahía Blanca port, using natural gas piped in from the Vaca Muerta shale formation in Western Argentina. The vessel has production capacity of 500,000 metric tons, or about 0.07 Bcf/d, and could produce up to eight LNG export cargoes per year, according to the U.S. Energy Information Agency.

Financing challenges will also remain a key barrier to the development of the FLNG sector, Fitch said. “This is evident from the recent breakdown of the proposed Fortuna project off the coast of Equatorial Guinea.” Ophir Energy lost the license to develop the gas discovery after the government refused to renew the permit, which expired last December.

“Moving forward, we expect more FLNG projects to adopt a tolling system for companies providing the FLNG vessels,” Fitch said. “This will offer a more flexible approach that is more suited to smaller developers. This bodes well for FLNG developers who have struggled to attract business by developing these facilities as assets for purchase, which entails a much higher upfront capital cost.”