Turkish firm Karpowership owns a fleet of floating power stations and FSRUs that are deployed around the world to help emerging markets plug energy supply gaps and provide much-needed electricity. Chief commercial officer Zeynep Harezi Yilmaz spoke to Petroleum Economist about the company’s unique business model, current activities and plans, and the effect of recent LNG market volatility.
Karpowership's fleet includes 36 powerships totalling 6GW of generating capacity, with each vessel’s output ranging from 30–500MW. Yilmaz explained the company started as a “speculative business”, pioneering the technology and constructing its floating power stations ahead of any contracts for their use. Now the company is active in 14 countries, with its units providing baseload, mid-merit and peak-shaving electricity. The firm has four powerships and an FSRU totalling 560MW based in Brazil, for instance, as well as vessels providing power to eight African countries. It is also active in Asia, Oceania and the Caribbean, with recent projects commissioned in New Caledonia and the Dominican Republic. These ships can be contracted, deployed and put into operation significantly faster—in as little as 30 days—than a conventional, onshore power project.
“In Asia, we are looking at different opportunities in Vietnam, the Philippines, Sri Lanka, Malaysia, Indonesia and Myanmar,” said Yilmaz, adding the company is also looking at “five, six different countries” in Latin America, and “Togo, Kenya, and the Democratic Republic of Congo” in Africa. The company already has 200MW in operation in Cote d’Ivoire and may expand that commitment.
South African progress
The firm was recently awarded a contract to supply 1,220MW in South Africa as part of the government’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). “If we are able to execute that, it will be one of our flagship projects,” said Yilmaz. It is “important to note that South Africa has 40GW of coal-fired generation capacity”, which is a huge amount of capacity to convert to using gas, especially “as there are only four LNG import ports in South Africa”—namely Saldanha Bay, Richards Bay, Durban and Coega—she continued. Karpowership has been selected to bring FSRUs to three of those four ports.
South Africa’s government launched the RMIPPPP in 2020 with the goal of shoring up its strained electrical grid by acquiring an additional 2,000MW of capacity. Under that competitive tender, Karpowership was granted three of the 11 projects awarded, for a total of 1,220MW. But the Turkish firm was previously blocked from deploying to South Africa due to reported issues over environmental approvals.
“It is very natural for major infrastructure projects to be questioned widely, both by various authorities, interest groups and the public”, said Yilmaz. “South Africa has had issues in the past with procurement processes, so we respect the fact that the authorities want to make sure there is no room for mistakes and check everything diligently”, she continued. “Delays are therefore very natural in these large-scale projects, and our job is to ensure no question remains unanswered and stakeholder requirements are satisfied”. But Yilmaz is confident the company will “receive our environmental permits in the next month or two, and we hope to have 1,220MW operational in South Africa in less than one year. Our ships and FSRUs are ready.”
Developing countries suffer from a lack of reliable power generation, and installed capacity is often from emissions-intense and inefficient sources, such as diesel-fired generators. A company such as Karpowership can help accelerate the adoption of gas as a cleaner fuel, although recent market volatility stemming from the Russia-Ukraine war has had an impact, Yilmaz explained.
Karpowership has a 220MW vessel based in Senegal, with an additional 120MW ship on its way to expand the total capacity of electricity supplied to the country. The company initially planned to send an FSRU to supply gas to both the powerships, along with onshore Senegalese power stations. “But due to the Russian-Ukrainian war, LNG prices have increased dramatically, which made liquid fuels still more economic… so that is why we are waiting together with the Senegalese authorities for LNG prices to come down so that we can convert both our powerships and [national electricity company] Senelec’s land-based operations at Bel Air Power station to use LNG,” said Yilmaz. The liquid fuel being used instead is low-sulphur fuel oil (LSFO).
And there are precedents for shifting from liquids to gas. Karpowership operates a 500MW powership in Ghana, which initially utilised LSFO before being connected to the country’s gas pipeline network. The gas is “low cost”, so the floating power plant will “most likely” continue to use pipeline supply, even if LNG prices decline, said Yilmaz.
Contracts and risk
As for the relative affordability and benefits of LNG versus liquid fuels, “clients and consumers are best placed to make that decision”, said Yilmaz, noting that, with more LNG production capacity due to come online, prices for the liquefied fuel are expected to fall from 2026. LSFO availability and prices, meanwhile, have not experienced the volatility seen in the gas markets.
As for sourcing LNG, that too depends on the client, Yilmaz explained. Karpowership can sign long-term supply contracts or secure spot volumes. “Karpowership can run a competitive tender process, or if the client wants to take spot prices we can go out on their behalf. If they want to buy the LNG themselves and deliver it, that is also an option which we fully support”.
Operating around the world, Karpowership must manage its exposure to risk. “We take the full list of insurance instruments available to manage risks and ensure our operations are credible. In some circumstances, where insurance is not available, we take on some of the risk ourselves,” she said, stressing the company complies with all international sanctions.
Most of Karpowership’s clients are government utilities who are the offtakers for the electricity produced, “without any intermediaries” emphasised Yilmaz. New Caledonia is the exception, as Karpowership supplies nickel mining company SLN there. To mitigate against currency risk, the power company’s contracts “tend to have a portion denominated in the local currency to support local spending, such as personnel salary and supporting the local crew with food and equipment”, while the rest “tends to be in hard currencies”.