A bit about Floating Liquefied Natural Gas (FLNG)

With many traditional oil and gas reserves drying up, the industry is looking at new, previously uneconomical fields and methods of extraction. Tight gas, sour gas, and coal seam gas projects have commenced, as well as stranded gas;  deposits of gas that whilst significant don’t warrant the construction of a large scale onshore LNG facility. Floating Liquefied Natural Gas (FLNG) is becoming increasingly accepted as a realistic potential way of reaching and monetising these stranded reserves.

Essentially, an FLNG facility is either a ship or barge that can sail or be towed to offshore gas discoveries, extract gas, freeze it to liquefied natural gas (LNG) and offload the LNG to tankers for shipping. FLNG has a huge advantage in being mobile, as it has the ability to move between company assets with relative ease. Organisations such as Royal Dutch Shell are hoping FLNG technology will prove both cheaper and faster than building onshore liquefaction facilities.

FLNG is also being touted as a more environmentally friendly option; helping oil and gas operators reduce their projects' environmental footprints. It will negate both the need for the lengthy environmental approvals process and the relocation of communities to make way for onshore developments, reducing the time before start up.  The use of waste heat recovery and aero derivative gas turbines creates high thermal efficiency and decreased emissions. Each facility contains an acid gas removal unit (AGRU), which produces a CO2 effluent with minimum remaining hydrocarbons. As there is no flaring, apart from a nominal purge flow, this CO2 is vented at a safe level in the atmosphere.

Another benefit of FLNG is security. Offshore facilities are far less likely to have security breaches (including information loss, vandalism, and terrorism) and as extraction would be possible without touching the host nation’s soil this would significantly reduce the risk. It is no wonder then that several companies eyeing FLNG technology are considering it for oil deposits in high risk countries such as Iraq and Nigeria (even though many of the actual deposits are onshore).

Estimated costs put the technology at roughly AUD$5 billion per ship. Although this cost is in line with the cost of developing an onshore processing facility, the cost of the entire project would be drastically reduced as an offshore platform and associated piping material would not be required.

In Australia, Shell plans to deploy the world’s first floating liquefied natural gas plant, to acquire and process gas from the Prelude and Concerto gas fields in the Browse Basin off Western Australia’s Kimberley coast. In July 2009 they awarded a contract to Samsung Heavy Industries and Technip to design, construct and installfloating LNG facilities for the company.