As much as one-third – 60 trillion cubic metres – of the world’s known natural gas reserves are located in offshore fields. Traditionally, gas from these fields has been processed offshore to the extent necessary to be able to transfer it, via subsea pipeline, to a shore-based natural gas processing plant, where it is processed to consumer specification and sold into local gas distribution networks.
The drive to develop gas fields further offshore and in ultra deep water (more than 1,000 m), has led the offshore gas industry to rethink building pipelines to onshore processing facilities. As a result, a number of organisations have commenced developing the technology necessary to process, liquefy and store the gas on an LNG Floating Production Storage and Offloading (FPSO) vessel, thereby developing otherwise uneconomical fields.
FLNG is considered a key strategy in meeting the increased demand for LNG which is currently growing faster than that of any other fuel source globally. According to Douglass-Westwood, annual LNG consumption is predicted to increase from 2.8 trillion cubic metres to 4.8 trillion cubic metres between now and 2025.
Although they build on the existing technology of onshore LNG plants and FPSO units, an LNG FPSO is a complex development. The technology transfer is considerable; it requires an in depth understanding of both land and offshore based technology to merge these technologies successfully.
A primer on LNG FPSOs
It was only in the mid 1990s that substantial research and experimental development commenced into LNG FPSOs. By this time the technology for oil FPSOs was well developed and more than 100 oil FPSOs were operating around the world.
Today LNG FPSOs offer a solution for offshore gas fields that are too small or remote to be developed economically on their own, without nearby infrastructure. This is because an FLNG development would eliminate the need to construct pipelines to shore, port facilities and production platforms. In addition, carbon dioxide could be removed earlier in the production chain than is the case with onshore facilities.
WorleyParsons has been involved in hull, mooring and topsides (processing) aspects of over 40 FPSOs worldwide, in all project phases – from concept selection through operation. It was also involved in the world’s first condensate and LPG Floating Storage and Offloading vessel (FSO).
The recent acquisition by WorleyParsons of deepwater engineering specialist Intec Engineering has given the company additional technical expertise in offshore subsea and floating production systems. Drawing on this combined experience, WorleyParsons has undertaken a number of concept development studies for FLNG facilities as an independent facility designer and technology assessor. These projects are supplemented by WorleyParsons’ specialist expertise in the design of land-based LNG and fixed offshore LNG processing facilities. WorleyParsons’ studies made it clear that the qualification of new technology, technology transfer (from onshore to offshore) and the spot market for LNG would all significantly influence the design of an LNG FPSO.
LNG FPSO vessels are currently being considered for a number of developments, particularly those in offshore Australia which are isolated from existing gas infrastructure but in close proximity to markets in Asia. According to FlexLNG, the first FLNG FPSOs are already under contract and are likely to be seen off the coasts of Indonesia, East Timor and Nigeria from as early as 2010.
Surmounting major challenges
Central to the success of any FLNG project is an understanding of the supply chain integration requirements of the LNG industry.
Currently the LNG market is being driven largely by projects which are developed to supply a specific contract. Designers of FLNG projects should understand there are few LNG Carriers (LNGCs) available for short-term charter. In 2006, for example, only four LNGCs were available for short-term charter. This means that, currently, a successful FLNG project must be linked directly to the market by contract, rather than rely on the spot market as is typical for crude and condensate production.
It is vital that in the early design stages the availability of the entire system is modelled with enough accuracy to determine technical and economic feasibility. Facility uptime (availability) requirements are usually more than 98 per cent and are driven by the need to deliver a steady flow of LNG to the market. The facility designer must to take into account the entire supply chain, including; offloading technology, LNG Carrier availability – including number, size and manoeuvrability, the number and duration of voyages and the containment technology deployed – and likely future markets.
Secondly, while there have been significant advances in technology for conventional oil and gas projects, much of it is not directly transferable for FLNG projects. Even the technology which is used in the LNG Carrier industry needs to be qualified for offshore FPSO applications and cannot be transferred without modification.
An additional complication is that the facility availability requirements for a FLNG plant are inextricably linked to the LNG to market supply chain. Additional technology challenges emerge at the interfaces of the supply chain when LNG is offloaded and re-gasified.
The current development status of these systems means that risks associated with new technology must be managed early in the concept and Front-End Engineering and Design (FEED) phases, with any knock-on effects to the detailed design phase being clearly understood. Consequently, it is important to load the early design phases with detailed supply chain analysis, uptime simulations, new technology qualification, and undertake an assessment of regulatory requirements.
Additionally, the current proprietary rights on containment systems and the special tooling requirements, together with the shipyard infrastructure required for FLNG projects, can affect the overall design, contracting strategy, schedule and feasibility of a project.
Ultimately, these issues cannot be resolved in isolation. They require an unbiased knowledge of available technologies and of the license situation of all individual components. This ensures objective technology decisions are made during all design stages, thereby maximising facility uptime and the ability to competitively negotiate build contracts.
The future of FLNG
LNG is currently the fastest growing fuel source in the world. In 2007 expenditure for LNG import terminals, LNGCs and Liquefaction Terminals was just under $US15 billion ($15.4 billion), with expenditure forecast to exceed the $US22 billion ($A22.6 billion) this year and $US35 billion ($A36 billion) by 2011.
With annual global LNG consumption predicted to nearly double to 4.8 trillion cubic metres between now and 2025 (Douglas-Westwood) deepwater gas fields will play an increasing role in meeting global demand.
As the operators of these fields seek to overcome expensive long distance pipelines, FLNG technology will play an important role in the global gas market. Today, it is estimated that more than 90per cent of natural gas is transported by pipeline. By 2025, however, it is predicted the ratio will be 69 per cent in pipelines and 26 per cent as LNG.
The development of a new generation of LNGCs with greater storage capacity and
next generation containment technology
able to handle partial loads and the commissioning of more terminals will accelerate the growth of an LNG spot market. This, in turn, will make small to medium size FLNG FPSOs attractive development options.
The signs for the FLNG industry are promising, with early market movers already emerging. We are seeing LNG shipping operators such as Golar LNG, BW-Offshore, Shell and Höegh and national oil companies such as Malaysia’s Petronas, Brazil’s Petrobras and Nigeria’s NNPC all actively pursuing FLNG opportunities – and WorleyParsons has been supporting some of these.