It was more than a decade ago that the visionaries of Project Azure predicted that possibly by 2004, a complete floating LNG chain could be built including floating FPSO (FLNG) and a floating LNG FSRU (Floating Storage, Regasification Unit), linked by LNG shuttle tankers transporting LNG from the FLNG to the FSRU. Today in 2014, the chain still does not exist. Although there are many floating LNG receiving terminals operating successfully around the world, the elusive FLNG has still not materialized. However, now that construction has started on Shell’s Prelude and Petronas’s PFLNG-1, realization of the vision of floating LNG chain is imminent.
Many technology advancements have combined to make floating LNG chain a reality. Maturation of subsea well and control systems have mitigated the risks of subsea well operations. Proven glycol (MEG) and other regenerative hydrate management systems have allowed longer tie-back distance. Cost-effective mooring systems for large FPSO, flexible flow-lines and catenary risers have enabled floating system of FLNG size to be seriously considered. However, it is the advance of floating LNG technologies that have evolved over the past 20 years that finally tipped the risk-reward equation. Technologies such as offshore ship-to-ship LNG transfer, motion tolerant processing and rotating equipment, LNG spill and gas safety, and deep water cooling water lift systems have matured to an acceptable level.
The rewards of FLNG are very compelling. Major cost savings can be achieved by eliminating:
Well head/production platform(s)
Processing platform to facilitate gas treating, liquids recovery and stabilization
FSO for condensate and NGL products
Gas compressor and pipeline to transport gas to an onshore LNG plant
and replace with a FLNG system located in the field. There are also the intangible cost savings such as efficiency gains by constructing the entire system in a ship yard, material and manpower logistics, and shorter project duration. In places where space constraint and regulatory restrictions make land-based LNG liquefaction and regasification difficult, FLNG and FSRU are cost-effective alternatives.
This paper will present the economics drivers that make floating LNG chain attractive to producers and buyers alike, and the many conventional production technologies and those unique to FLNG that combined to enable FLNG chain to be developed with confidence. The realization of floating LNG chain will enhance the economics of LNG as a preferred fuel.