Floating Liquefied Natural Gas Comes of Age

Abstract

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper OTC 24800, “Floating LNG Is Coming of Age,” by Michael S. Choi, SPE, ConocoPhillips, prepared for the 2014 Offshore Technology Conference Asia, Kuala Lumpur, 25–28 March. The paper has not been peer reviewed. There are already many floating liquefied-natural-gas (LNG) receiving terminals operating successfully in the world. The economics of floating LNG (FLNG) is compelling. Major cost savings can be achieved by the streamlining allowed by FLNG processes. There are also intangible cost savings, such as increased efficiency owing to construction of the entire system in a shipyard, improved material and manpower logistics, and shorter project duration. Introduction Global LNG trade is expected to more than double by 2020. As consumers and governments around the world recognize the environmental advantages of power generation with natural gas, demand for LNG has increased significantly. Some new projects will be developed with FLNG technologies, perhaps even with a full FLNG chain: floating production, storage, and offloading (FPSO) for LNG production in the field; offshore LNG transfer to shuttle tankers; and floating receiving and storage units that serve to vaporize the LNG and export the gas to the eventual gas-distribution grid and consumers. Compelling Economics Of the 2,500 Tcf of gas available around the world, nearly half is reportedly located offshore in a water depth of more than 200 m and farther than 250 km from land. For some of these offshore fields, potential cost savings of 35–50% have been estimated for FLNG alternatives compared with a conventional development with a land-based plant. The cost savings are achieved with an all-purpose FLNG system located in the offshore field by eliminating wellhead/production platforms; processing platforms that facilitate gas treating, liquid recovery, and stabilization; floating storage and offtake vessels for condensate and natural-gas-liquid (NGL) products; and gas compressors and pipelines for transport gas to onshore LNG plants. Even onshore gas production can benefit from FLNG. Many in-shore discoveries are located in river deltas where LNG export by tankers requires long and costly jetties to reach acceptable water depth. When combined with extensive site preparation and continuous dredging to maintain a viable shipping channel, the economics and safety of an onshore plant are severely impaired. These challenges can be eliminated by piping the gas to an FLNG vessel moored at a near-shore location with convenient tanker access. With the rapid growth of LNG projects, labor and logistical infrastructures are severely challenged in some productive regions. An example is western Australia, where multiple projects in remote locations have created a shortage of resources of every kind. The results are large cost overruns and significant delays. FLNG can ease the burden by offering established organization and a disciplined workforce, existing supply-chain infrastructure, and efficiency of construction in a shipyard.