A giant vessel docked at the port of Moheshkhali in Bangladesh two months ago, propelling the populous but poor nation into the fast-expanding club of liquefied natural gas (LNG) buyers.

The Excellence is the latest floating storage and regasification unit (FSRU), a type of carrier that has proliferated since 2015 as many countries switch to a cleaner and increasingly cheaper fuel than oil and coal.

But the young FSRU industry has been beset by more project delays than successes in the past 12 months as fluctuating energy prices, shipping rates, government policies and not least strong demand for gas in China reshape the sector.

With the number of countries importing LNG having risen to 42 from 30 in three years, "plug and play" projects, in which regasification vessels link to well-worn physical and commercial infrastructure, are expected to continue if at a slower pace.

But strong Chinese demand for super-chilled LNG has dampened the allure of projects in other countries by lapping up excess supply, and new entrants are trying to develop smaller ventures.

"In the last year or so, FSRUs have suffered a bit of a setback from the stellar growth they were previously enjoying," Andrew Buckland, Wood Mackenzie's global LNG trade and shipping principal analyst, said.

"Some of that is down to conditions unique to particular proposed projects. But a lot of it is more to do with demand being stronger than expected in existing conventional markets."

Since a golden period between 2015 and 2017, when almost half of the world's 34 FSRUs came onstream, projects in Ghana, Pakistan and Ivory Coast have been scrapped and in countries such as Chile, Croatia and South Africa, delayed.

Those stung include oil majors such as ExxonMobil, trading houses including Trafigura and shipping companies that provide FSRUs such as Norway's Hoegh LNG. Some have backed off; others have regrouped in different configurations.

Plug and Play
FSRUs are relatively new - the first was put in operation in 2005 by Excelerate, which figured out how to fit an entire LNG terminal onto a single ship. The unlisted U.S. company, together with Golar and Hoegh, now dominates the industry.

On the face of it, they have a big advantage over onshore import terminals - cheaper by half at around $300-400 million, twice as quick to deliver and flexible to boot because the vessel can journey to other destinations once it is not needed.

This was shown by Egypt's first FSRU project, completed by privately owned BW Group within just five months at Ain Sokhna on the Suez canal.

But the project was an ideal "plug and play" venture: suffering severe power cuts as its own gas output fell, Egypt had the infrastructure to accept regasified LNG.

Conversely, Ghana demonstrates the difficulties of what are still complex projects despite their lower costs and lead times. The country has yet to enter the LNG club despite coming so close that two FSRUs were earmarked for two projects.

Here, issues related to the construction of onshore infrastructure and solid contracts with power plants, the end consumers of the LNG, delayed and scuppered successive ventures. The Golar and Hoegh FSRUs were reassigned to other locations.

"Developing countries by their nature have limited capacity when it comes to policy and regulatory structures," said Lance Crist, head of natural resources for International Finance Corp, a World Bank arm that has lent to several FSRU projects.

"Many of these are much smaller markets. You're not talking about large, liquid markets with established infrastructure where you can just plug and play," he said.

Less Need for New Markets
While the Ghana saga unravelled over the past three years, global LNG market trends changed the dynamics of FSRU projects.

Rates for transporting LNG rose, boosting the revenues of LNG shipping companies that were thinking of branching into FSRUs, and China's demand for gas skyrocketed, soaking up an anticipated oversupply in the market.

China's environmental drive to convert heating plants from coal to gas drove 40 percent of global LNG demand growth last year and increased Chinese gas imports by 15 percent, making it the second-largest LNG buyer after Japan, the International Energy Agency said in June.

This created less urgency to open new markets by parking FSRUs in countries that had hitherto not bought LNG. Existing terminals, usually underused, took more supplies.

The result has been a slowdown in the delivery of planned projects.

"Prior to last winter, when it looked like there'd be excess LNG, creating new demand centres via FSRUs looked a more attractive strategy than it does now," Buckland said. "Which is not to say they won't come back to that in the future."

Meanwhile, LNG carrier rates, which slumped to $25,000 per day in 2017, more than tripled to $85,000 a day. This meant those companies that operate LNG carriers but wanted to join the FSRU bonanza had missed the boat - at least for now.

For example, LNG carrier company Flex LNG backed out of the FSRU business in May, saying shipping rates and project delays had made the move unattractive compared to improved carrier rates, its chief source of revenue.

Less is More
Some large projects are still due to come onstream, if at a slower pace: Ivory Coast is scheduled to become an LNG-buying nation by 2020 with a Total project using a Golar FSRU.

The rush of new projects between 2015 and 2017 together with predictions of LNG oversupply also attracted trading houses wanting to secure markets for the rising volumes they bought and sold.

Trafigura, Vitol and Gunvor have competing plans for FSRUs in Pakistan after the country became an LNG importer in 2016 but have failed to get projects in Bangladesh off the ground. Now the urgency has receded with China's growing appetite for LNG.

But there has been a proliferation of much smaller projects: LNG-to-power ventures, FSRUs for single users such as gas-intensive fertiliser plants and "petrol stations" for ships using LNG as bunker fuel in northern Europe.

"The old 'FSRU only' business model is becoming crowded with pressure on returns," Golar told investors in June, saying it was turning to LNG-to-power projects to drive some of its growth.

The World Bank's IFC has also recognized the new trends and is hunting for more projects.

"We are still in the very early stages of a pretty dramatic transformation," Crist said. "You require critical mass or scale. Once you have an anchor project then you can start doing the milk run - smaller cargoes that will proliferate pretty soon over the next five years."

(Reporting by Sabina Zawadzki; Editing by Dale Hudson)