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Editorial Comment: The Future of FLNG: Less is More?

Global LNG export capacity is expected to increase by 45% between 2017 and 2022, to more than 400 metric MMtpy, with 90% of the new capacity coming from sanctioned projects in the U.S. and Australia. By 2050, this capacity is anticipated to exceed 700 MMtpy. Regasification capacity is anticipated to increase even more sharply.

Growing volumes of these production and import capacities will come in the form of floating liquefaction (FLNG) and regasification (FRGU) vessels. FLNG projects backed by major oil and gas firms and supported by adequate gas reserves and LNG demand are the most likely to achieve completion. Africa and Asia are viewed as key areas for liquefaction and regasification spending. Australian FLNG projects also have a good chance of moving forward, as they will be in close proximity to Asian countries with growing LNG demand.

However, according to a 2019 survey of LNG industry professionals by DNV GL, the industry will prefer smaller FLNG projects and tanker conversions in the future over massive FLNG projects. The first FLNG vessel to come online was Petronas’ $2-B, 1.2-metric-MMtpy PFLNG1 project (Fig. 1), started up in November 2016 offshore Sarawak, Malaysia. In March 2019, Petronas announced that it had relocated the vessel from the Kumang cluster field to the Kebabangan cluster field, offshore Sabah.

GP1219 Editorial Comment Fig 01

Fig. 1. Petronas’ PFLNG1 vessel was the world’s first floating liquefaction plant, commencing operations 3 yr ago offshore Malaysia.

Shell’s Prelude, pictured on the front cover, is the largest seafaring vessel ever built at 488 m long and 74 m wide. The long-awaited Prelude FLNG vessel, located offshore Broome, Western Australia, shipped its first cargo in June 2019. Shell and its partners produce an impressive 3.6 MMtpy of LNG, 1.3 MMtpy of condensate and 400,000 tpy of LPG on the floating facility, which cost more than $12 B to construct.

In the future, however, smaller vessels may have several advantages. Smaller-scale FLNG vessels are cheaper to build and operate, faster to deploy and effective at exploiting smaller volumes of stranded gas and serving niche markets. In these scenarios, it is more likely that a contractor will liquefy gas on behalf of the operator of the vessel, thereby reducing risk by purchasing a service rather than buying an asset.

For more in-depth information and forecasts for market trends, construction projects and spending in the LNG/FLNG and gas processing sectors, please see the Natural Gas/LNG section of the “HPI Market Data 2020” report, published by Hydrocarbon Processing in November and available for purchase at www.hydrocarbonprocessing.com/market-data/hpi-market-data-book GP


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

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FEATURED COLUMNS

Business Trends: Four challenges to Australia’s rising role in the global LNG market
-David Gross
The past 10 yr have been the decade of natural gas, but the next 10 yr will belong to LNG as countries race to build out their export capacity.
Editorial Comment
-Adrienne Blume
Australia and Middle Eastern countries, which have been net LNG exporters, are now foraying into LNG imports due to supply issues.
Industry Focus: Mixed performance for Africa’s gas markets in 2019 poses questions for next decade
-Shem Oirere
As 2020 begins, Africa’s gas market is left with a mixed bag of achievements that only partly confirms a prediction by the International Gas Union (IGU) in early 2019 that the continent’s natural gas segment is “facing a potential turning point.”
Regional Focus: North American NGL to boom alongside petrochemicals
-Eugene Khartukov
Strong natural gas production and rapidly rising demand from petrochemicals makers have resulted in record-high production of natural gas plant liquids in North America, particularly in the U.S. This growth has been led by ethane.


GasPro 2.0: A Webcast Symposium

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Following on the heels of the highly successful GasPro 2.0 Webcast Symposium in October 2018, the second GasPro Webcast Symposium 2.0 will take place on October 24, 2019.

The 2019 web event will gather experts in the fields of LNG, gas processing, and gas transport/distribution to share their operations expertise, engineering and design solutions, and technology advances and trends with our audience.

Attendees will learn about technology and operational solutions and deployments in a number of areas: plant design and expansion, construction, NGL production, optimization, sulfur removal, marine operations and separation technology.

October 24, 2019 08:30 AM CDT

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