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Shell, TSC Sign Agreement to Enhance Collaboration on FLNG Projects

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Shell and the Technip Samsung Consortium (TSC) have inked a heads of agreement to enhance collaboration on the design, engineering, procurement, construction and installation of future innovative floating liquefied natural gas (FLNG) projects, the latter said in a statement Thursday.

"The agreement builds on the existing relationship, formed in 2009, to ensure the parties can capitalize on insights gleaned from the design and construction of Shell's Prelude FLNG facility and expand the technology offering to the energy market," Technip said in the statement.

"This heads of agreement will enable Samsung, together with partners, Shell and Technip, to further strengthen its reputation as a definite leader in the FLNG business with the successful completion of FLNG projects to come … I am confident that Samsung is ready to construct multiple FLNGs in its Geoje shipyard and is fully committed to achieving the highest quality and on-time delivery of Shell's FLNG facilities in accordance with the spirit of the partnership," Samsung Heavy Industries' President and CEO, Dae Young Park, said in the statement.

The landmark Prelude LNG project off Western Australia is the first of what Shell hopes to be many FLNG projects. Shell signed a global master agreement July 28, 2009, with TSC to design and build multiple Shell FLNG facilities over a period of 15 years.

Technip noted that construction of Prelude is underway, where the first steel-cutting was celebrated in October this year. Once operational in 2017, the facility will produce at least 5.3 million tonnes per annum (mtpa) of liquids (3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG).

Douglas-Westwood's Associate Director Jason Waldie said in a natural gas conference in November that Asia Pacific is expected to dominate the FLNG market, with Australasia bagging a large chunk of investment dollars.

Douglas-Westwood estimated in 2010 that over $23 billion would be spent on FLNG development from 2010 to 2016. During this period, Australia is expected to dominate the FLNG market with $5.3 billion in projects, followed by Africa with $5.2 billion in projects and Asia with $4.7 billion in projects.

Besides Shell, other companies seeking to develop liquefaction FLNG facilities include Flex LNG, Petrobras, SBM Offshore, Bluewater, Hoegh LNG, Excelerate Energy, ConocoPhillips and Sevan Marine are developing FLNG liquefaction design concepts.

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