The LNG-FPSO concept is receiving much attention in recent years, due to its active usage to exploit oil and gas resources. The FPSO offloads LNG to an LNG carrier that is located close to the FPSO, and during this transfer process two large vessels are in close proximity to each other for daylong periods of time. Due to the presence of neighboring vessel, the motion response of both the vessels will be affected significantly. Hydrodynamic interactions related to wave effects may result in unfavorable responses or the risk of collisions in a multi-body floating system. Not only the motion behavior but also the second order drift forces are influenced by the neighboring structures due to interactions of the waves among the structures. A study is made on the time domain analysis to assess the behavior and the operational capability of the FPSO system moored in the sea having an LNG carrier alongside under environmental conditions such as waves, wind and currents. This paper presents an analysis tool to predict the dynamic motion response and non-linear connecting and mooring forces on a parallel-connected LNG-FPSO system due to non-linear exciting forces of wave, wind and current. Simulation for the mooring performance is also investigated. The three-dimensional source-sink technique has been applied to obtain the radiation forces and the transfer function of wave exciting forces on floating multi-bodies. The hydrodynamic interaction effect between the FPSO and the LNG carrier is included to calculate the hydrodynamic forces. For the simulation of a random sea and also for the generation of time depended wind velocity, a fully probabilistic simulation technique has been applied. Wind and current loads are estimated according to OCIMF. The effects of variations in wave, wind and current loads and direction on the slowly varying oscillations of the LNG and FPSO are also investigated in this paper. Finally, some conclusions are drawn based on the numerical results obtained from the present time domain simulations.