The oil and gas industry has recognised the importance of nimble floating LNG vessels such as Hilli Episeyo in delivering gas in remote areas, triggering a spate of orders for Mark II versions.
The most recent order, announced on 17 December, is the go-ahead from BP for Golar LNG’s new FLNG to support the first phase development of the Greater Tortue/Ahmeyim field off Mauritania and Senegal.
And there may be more orders in the offing. As Golar pointed out, “[Hilli Episeyo’s] proof of concept continues to add momentum to both existing and new opportunities under discussion.”
The vessel, a next-generation design, will be built by the Keppel Shipyard that created Hilli Episeyo. The new FLNG will use Black and Veatch’s Prico gas-processing technology. Design work for the vessel, which will have a capacity of 3M tonnes per annum is in its final stages. According to Golar, “indications are that [the design] will be cost-competitive with Hilli Episeyo’s design.”
The success of Hilli Episeyo, which has already exported its 10th LNG cargo, underlined the potential revealed by Petronas’ FLNG, PFLNG Satu, first deployed off Malaysia in 2017. The obvious merits of PFLNG Satu sparked the industry into action almost overnight.
“Research and development moves rapidly in the oil and gas industry,” noted Alistair Black and Charles Wood from law firm Dentons in a recent paper entitled The development and financing of future FLNG projects. “However, few could have foreseen the pace at which floating LNG vessels are now becoming commoditised.”
The breakthrough followed the development of much more compact liquefaction systems. Vessel operators realised that existing LNG carriers could be retrofitted with topsides based on established – but shrunken – liquefaction processes, typically from manufacturers Air Products and Black and Veatch. “[They] are significantly cheaper and quicker to deploy than the highly bespoke – and expensive – vessels developed to date by a number of the majors,” Dentons pointed out.
In the space of little more than two years since the launch of Petronas’ PFLNG Satu, another generation of FLNGs is coming over the horizon. There are several new projects in the pipeline – and financiers are queuing up to support them. “Now that the first of these vessels has been successfully financed and deployed, we have seen significant client interest,” reported Dentons.
Much of the action is in central Asia and Africa, relatively new supply regions. An FLNG is being developed for the Coral South LNG project, for instance, that is estimated to hold over 450Bn m3 of gas. It will be Africa’s first FLNG.
The penny is dropping rapidly about the versatility of FLNGs. “The speed and efficiency of supply is increasing due to the development of new technologies such as small-scale LNG and FLNG,” explained Kogas research and development institute’s senior research engineer Kidong Kim, citing their suitability for previously unviable “small pools” and “stranded fields” that are often located in remote locations.
Another strong argument for FLNGs is speed of construction. According to a survey by classification society DNV GL, 61% of respondents said their company would support investments in projects that could be put into operation in shorter timeframes than fixed platforms or giant floating storage and regasification units.
Meanwhile, manufacturers of liquefaction equipment are scrambling to meet the demand. In October, America’s Air Products opened an equipment testing facility at its plant at Port Manatee in Florida and expanded manufacturing capacity there by 50%. On the back of booming demand, Air Products posted revenues of US$8.2Bn in the 2017 financial year, in large part because of the rush of orders for FLNGs.
Source:lngworldshipping
