The energy industry has discussed floating natural gas liquefaction for more than 30 years as an option to develop gas from remote offshore locations. Douglas-Westwood recently forecast $47.4 billion total will be spent on FLNG during 2013-19.
In its report, "World FLNG Market Forecast 2013-19," Douglas-Westwood analysts expect more than $28 billion to be spent on liquefaction and $19.1 billion to be spent on import terminals.
Floating-liquefaction allows producers to bring liquefaction directly to the source of offshore gas. Murray Dormer, author of the forecast, expects that Asia and Australia will account for more than one-third of the spend Douglas-Westwood anticipates worldwide for offshore liquefaction and regasification terminals during 2013-19. Latin America also will attract such projects.
"The challenge of how to access the substantial volumes of conventional offshore natural gas reserves is bringing new technology to the fore," Dormer said. "Floating LNG is the current favored option."
Floating LNG plans
Both Royal Dutch Shell PLC and Petronas plan construction of floating LNG plants. Shell approved construction of a massive project involving a floating LNG plant off Western Australia.
After spending more than $1 billion in development costs, Shell announced its final investment decision (FID) on the Prelude floating liquefaction project (OGJ Online, June 27, 2011).
The floating LNG facility is to be permanently moored for 25 years with production expected to come on stream around 2016. Technip SA of France and Samsung Heavy Industries of South Korea are handling front-end engineering and design process work. Production is estimated to comprise 3.6 million tonnes/year (tpy) of LNG, 1.3 million tpy of condensate, and 400,000 tpy of LPG (OGJ Online, Oct. 14, 2009).
Malaysia's Petronas announced its FID to proceed with a 1.2 million tpy floating liquefaction project off Bintulu, Sarawak. The plans, announced in June at the World Gas Conference in Kuala Lumpur, target 2015 for commissioning. Initial supplies for the vessel are planned from Kinawit field.
Petronas Floating LNG 1 (Labuan) Ltd., a unit of Petronas, awarded Daewoo Shipbuilding & Marine Engineering (DSME) Co. Ltd., a Technip-Daewoo consortium, a services contract for engineering, procurement, construction, installation, and commissioning for the 300 m long, 60 m wide floating liquefaction structure (OGJ Online, June 6, 2012). But not everyone is convinced about the technology yet. BHP Billiton has said it does not support FLNG as a near-term development option for the Browse LNG project. BHP holds 8.3% interest in the Woodside Petroleum Ltd.-operated Browse LNG project. During BHP's annual general meeting in Sydney in late November, BHP Chief Executive Marius Kloppers said he still considered the technology to be untested.
Western Australian Premier Colin Barnett also recently said he has concerns about using floating technology to process LNG from the Browse project. He favors processing the gas onshore.
FLRSU contracts signed
Contracts also have been signed for what promises to be the world's first floating liquefaction, regasification, and storage unit (FLRSU).
Pacific Rubiales Energy Corp., Bogota, authorized engineering and construction of the FLRSU through a build, own, and operate contract with Exmar NV, Antwerp (OGJ Online, June 4, 2012).
Exmar awarded a contract for the engineering, procurement, construction, installation, and commissioning of the FLRSU to Wison Offshore & Marine Ltd., Shanghai. The vessel is expected to be in operation by yearend 2014.
The FLRSU will consist of a barge equipped to convert 69.5 MMscfd of natural gas into LNG (about 500,000 tpy) that will be stored temporarily in on-board tanks with total capacity of 14,000 cu m. The LNG subsequently will be loaded either into permanently moored floating storage or shuttle tankers. Overall length of the FLRSU would be about 124 m; breadth 32 m; depth 18 m; and draft about 4.5 m.
The vessel will be moored to a jetty and supplied with gas by pipeline from onshore La Creciente field in the Lower Magdalena Valley.
Regarding recent investment decisions and contracts by various companies, Dormer said he considers floating liquefaction to be "well on its way to reality…. The sector is now buoyant with the prospect of over $47 billion to be spent 2013-19."