Floating Liquefied Natural Gas (FLNG) is a concept that has received serious attention from major companies involved in gas production since the 1990s. The idea behind the concept is simple: the ability to convert natural gas into LNG in an offshore environment will allow remote, and previously un-commercial, gas fields to be exploited.
After many years of research and development, it is still likely to be a few more years before we finally see a working FLNG vessel operating on a remote gas field. However, thanks to a number of FLNG projects currently in development around the world we are now getting a very good idea of what shape such a vessel might look like.
For example, Shell – which has been working on FLNG for some 15 years – expects its Prelude FLNG project to be ready in 2017, after taking its final investment decision to proceed with the project a year ago.
The Prelude gas field was discovered by Shell in 2007, while the nearby Concerto field was found two years later. Located almost 300 miles offshore the coastal town of Broome, Western Australia, the Prelude-Concerto fields – which contain around three trillion cubic feet of liquids-rich gas – are regarded as "stranded" gas because the cost to develop them using conventional gas extraction would be prohibitively expensive.
Once operational, the Prelude FLNG facility will produce at least 5.3 million tons per annum of liquids (3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG). It will also be the largest floating offshore facility in the world, displacing some 600,000 tons and being more than 1,600 feet long and 240 feet wide. It will be built by Samsung Heavy Industries' Geoje Island shipyard in Korea.
The Prelude FLNG facility's technology will see it chill natural gas produced at the Prelude field to minus 162 degrees centigrade (minus 260 degrees Fahrenheit), shrinking its volume by 600 times so that it can be shipped to customers in other parts of the world. Conventional ocean-going LNG carriers will load the liquids produced by the facility.
An engineer's dream
At a recent presentation given by Shell about FLNG, Rigzone heard two key people involved with the Prelude FLNG project – Marjan van Loon, vice president for LNG at Shell Projects & Technology and Harry van der Velde, Shell's manager of FLNG development – who were very enthusiastic about the progress the company has made.
"Working on such a facility is really an engineer's dream," said van Loon. "But we're only doing this because it makes business sense and because doing this floating LNG really monetizes gas that otherwise could not be monetized economically."
Van Loon pointed out that demand for natural gas is set to take off in coming years – driven by the development of economies like China and India where hundreds of millions of people are expected to see a significant rise in their standard of living.
According to the International Energy Agency's World Energy Outlook 2011, global gas consumption is set to increase by more than a third between now and 2030, when the annual demand for gas is set to be as much as 4,000 billion cubic meters. Indeed, this year will see the majority of Shell's hydrocarbon output be composed of gas rather than oil for the first time.
"A new supply of energy is critical. There are large gas volumes that are still to be developed. The International Energy Agency has predicted that there is more than 250 years of gas available in the world at the current consumption rate," said van Loon, who added that a lot of this gas can be accessed through the FLNG concept.
And Shell is well set up to take on FLNG thanks to a very strong background in gas and LNG in particular.
"We think we can do gas. We're good at gas, we have a lot of it and, also, we've done it for a long time," explained van Loon.
"We have played for five decades already in the LNG space. Being involved in the first LNG plant, the first LNG ships, most of the LNG plant built in the 80s, 90s, 2000s. We're an equity holder in a range of plants, and we don't only look at being an equity holder in those but really supporting LNG operations with our technical expertise. So, for all these operating plants that we are involved with we have agreements and we do actively support them with technical advice, expertise, building user networks, bringing greater capability and we're quite proud to say that group of plants delivers top quartile reliability."
Van Loon claims if a company wants to deliver an innovative project like FLNG then it makes sense for it to have a track record in delivering large gas projects, which Shell has.
Of course, the FLNG concept is not just about targeting very large, stranded gas fields. It is designed to be used in all sorts of ways.
"You can also use the floater to tie back several, smaller fields. You can also have a very big field and put several floaters on it. So you can play with the floater concept," explained van Loon.
"The floater itself is also re-deployable, so you don't need one field with 20 to 30 years of gas reserves to underpin one floater. You could live with a lower plateau volume and then move the floater to another gas field. It brings flexibility, it will be faster and it is comparable to onshore LNG or cheaper. And, certainly for remote gas, it is cheaper."
Not just a "glorified FPSO"
Van der Velde explained that a lot of effort has been put into the research and development of FLNG and that the concept is not just some kind of "glorified FPSO", nor is it simple to transfer onshore LNG technology to the offshore environment.
"One of the key things you need to sort if you go offshore with LNG is that you will have tanks that are not fully filled," said van der Velde.
"With the ship slightly moving the LNG will slosh a little bit. You need to be able to predict what sloshing there will be and what forces it will exert on the tank. So we did a lot of work on that, and we're really confident that we have models that can predict it and that we have a safe and sound system to contain the LNG while it is being produced."
Meanwhile, the offloading of LNG onto an LNG carrier required the designing of a loading arm system – specifically made to offload both LNG and LPG. Also a lot of simulations have been undertaken by Shell to see how an LNG carrier could moor alongside an FLNG facility.
"Another important thing to understand is how the vessel moves, reacting to the environment it is in," said van der Velde. "Prelude will normally be operating in a very benign environment, but there will be periods when there are hurricanes and we will need to be prepared and understand how the facility behaves."
Finally, with safety being a "paramount" feature in the design of the Prelude FLNG unit, the most hazardous equipment is designed to be as far away as possible from the crew's accommodation. As well as that, the FLNG facility has a modular design with safety gaps put in between each module so that if something goes wrong in one module the potential for escalation is mitigated.
Of course, Shell is not the only company that has embarked on an FLNG program. According to London-based oil and gas consultancy Upstream Advisors, there are at least four other FLNG projects currently being pursued around the world.
For example, also in Australasia (in the Timor Sea) SBM Offshore – a Dutch firm specializing in floating production and mooring systems – is working with Linde Group to help Thai energy firm PTTEP develop an FLNG concept that could begin commercial operations by the end of 2016.
Meanwhile, Petronas has plans to construct its own FLNG vessels for two projects at undisclosed locations. At least one of these projects is scheduled to see FLNG operations begin at least a year ahead of the Prelude FLNG scheme, although both vessels will have around one-third of the capacity of the Prelude facility.
Certainly, the business case for FLNG is strong. With increasing demand for natural gas, new ways to access large quantities of stranded gas need to be developed. However, Upstream Advisors – which provides advice to companies on FLNG, among other technologies, and recently undertook due diligence for a client on the Prelude FLNG project – points to another driver: security.
"Sometimes the drivers for implementation of this technology may not simply be the economics of stranded gas reserves but it may also be to do with mitigation of political and security issues where a land-based LNG plant may not be the first choice of some governments. A remote, offshore plant offers natural security – for instance in countries such as Israel, Lebanon, Cyprus," Upstream Advisors CEO Hiren Sanghrajka explained to Rigzone.
Meanwhile, Sanghrajka pointed out, FLNG also offers an alternative solution for a developing country, where there might not be an established local construction workforce or resources that could be readily available for a large infrastructure project. Some countries in West and East Africa, where natural gas has recently been found, are suitable candidates for FLNG because of this, Sanghrajka pointed out.
"In summary, FLNG technology has all the attributes to make a significant impact on the global gas industry," said Sanghrajka.
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