Definition of ‘FPSO (Floating Production Storage and Offloading)’
Acronym for Floating Production Storage and Offloading. FPSO is a floating vessel located near an oil platform, where oil is processed and stored until it can be transferred to a tanker for transporting. FPSOs can be converted former supertankers or can be purpose-built. Such a vessel used for natural gas is known as a FLNG, for Floating Liquefied Natural Gas.
Investopedia explains ‘FPSO (Floating Production Storage and Offloading)’
FPSOs are useful in newly established offshore oil regions where there is no pipeline infrastructure in place, or in remote locations where building a pipeline is cost-prohibitive. The use of FPSOs means that a tanker needn’t sit idle while a production facility produces enough oil to fill it. Also, the advantage of FPSOs over pipelines is that once an oil field has been exhausted, the vessel can be moved to another location. Today, there are about 200 such vessels operating worldwide.