Floating lng production nothing worthwhile is easy
Download
1 / 16

Floating LNG Production Nothing worthwhile is easy… - PowerPoint PPT Presentation


  • 72 Views
  • Uploaded on

Floating LNG Production Nothing worthwhile is easy…. 7 th ANNUAL DOHA GAS CONFERENCE MARCH 9-11, 2009. Poten & Partners: Consultants to the Global Gas & LNG Industries. Over 60 years as an advisor and broker to the energy and ocean transportation industries

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Floating LNG Production Nothing worthwhile is easy…' - quintin-hollis


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Floating lng production nothing worthwhile is easy

Floating LNG ProductionNothing worthwhile is easy…

7th ANNUAL DOHA GAS CONFERENCE

MARCH 9-11, 2009


Poten partners consultants to the global gas lng industries
Poten & Partners: Consultants to the Global Gas & LNG Industries

  • Over 60 years as an advisor and broker to the energy and ocean transportation industries

  • Providing strategic advisory services along the entire natural gas and LNG value chain

  • More than 35 LNG professionals in New York, Houston, London and Perth


Flng view should balance concept s pros and cons
FLNG view should balance concept’s pros and cons

  • Unprecedented level of interest in floating liquefaction

    • Diminishing gas supply, rising LNG prices spur development

  • Yet technical, commercial and legal obstacles remain

    • The first firm project commitment remains elusive

      Should Floating LNG’s backers be concerned?

  • FLNG on typical emerging technology development path

  • Obstacles can be overcome – tolerance for uncertainty advisable


Flng opening more gas to development
FLNG opening more gas to development

  • Accesses gas unsuitable for baseload development

  • Eliminates pipeline & loading infrastructure costs

  • Reduces security and political risks

  • Constructed in controlled

    shipyard environment

  • Can relocate facility

    upon field depletion

Data: Infield


Two distinct development paths emerging
Two distinct development paths emerging

Shell 5-6 mtpa concept

SBM Offshore 2.5 mtpa


Yet despite activity a first fid remains elusive
Yet despite activity, a first FID remains elusive

  • Small-scale:

    • Flex LNG – Progress LNG FID delayed in Jan’09

    • SBM Offshore – expecting to start client FEED in ‘09

    • Höegh LNG – completing generic FEED-level design

    • Other concepts in earlier stages of development

      • Excelerate/Exmar, BW Offshore, Teekay, Bluewater, Sevan…

  • Large-scale:

    • Shell – bids and possible award later in ’09

      • Candidate locations: Prelude, Greater Sunrise

    • Inpex – Abadi LNG startup planned for 2016


Marine settings present technical challenges
Marine settings present technical challenges

  • Waves, wind and currents

    • Process equipment performance

    • LNG storage “sloshing”

    • Open-water LNG transfers

  • Pretreatment requires up to 50% of available deck area

    • Favors feed gas with low levels of inerts and impurities

    • Condensates and LPGs increase processing, storage and offloading demands

Flex LNG Producer - IHI SPB Containment System

Source: Flex LNG

Höegh FLNG Concept – Side-by-side Loading

Source: Höegh LNG


Liquefaction choices far from mature

Black & Veatch PRICO SMR Process

Mustang NDX-1 Process (patent pending)

Source: Mustang Engineering

Liquefaction choices far from mature

  • Need simple, robust and compact liquefaction solutions

    • Single mixed refrigerant cycles

    • Gas expander-based cycles

  • Concerns

    • Process efficiencies

    • Scale-up performance

    • LPG refrigerant storage

    • Marine performance and reliability


Economics mired in uncertainty
Economics mired in uncertainty

  • Development costs look competitive, but require further critical analysis

  • Reserves depletion relevant to project’s economic performance

    • No long, slow depletion profiles

    • Additional drilling to sustain field’s production plateau; maintain feed gas pressures

  • FLNG relocation not necessarily easy

    • Balance costly, time-consuming retrofits vs. sub-optimal performance

    • Abandonment timing


Commercial structure a challenge for flng developers

1 INTEGRATED PROJECT

2 MERCHANT PROJECT

GSA

3 TOLLING FACILITY

Tolling Agreement

Commercial structure a challenge for FLNG developers

  • FLNG developer can gain broader reward/risk exposure through various “hybrid” structures

  • Ability to take on this broader role depends on

    • Project partners

    • Developer’s industry expertise

    • Developer’s ability to raise financing

Resource Owner


Construction risk sharing must be addressed
Construction risk-sharing must be addressed

  • Risk allocation between the shipbuilder, process vendor, and EPC contractor needs definition

  • More construction risks will ultimately rest with project owners or LNG buyers

    • EPC contractors don’t have the balance sheet to bear completion or performance risks for emerging technologies

  • Licensing agreements for jointly developed technologies

Source: Expro


Offshore production and loading affect fiscals spas
Offshore production and loading affect fiscals; SPAs

  • Upstream fiscal terms must address LNG exports

  • FLNGs likely to have tighter logistical constraints

    • SPAs focus on scheduling issues

Source: Bluewater


Financing will require proof of concept
Financing will require proof of concept

  • FLNG concept not fully proven – greater project execution and operational risks

  • First project will be subject to rigorous review to establish financing precedents

  • Loan tenor aligned with production life

  • Movable asset has some financing merits

  • High level of investment concentrated on a single hull raises insurance issues


Legal regulatory landscape can affect design
Legal/regulatory landscape can affect design

  • Marine setting brings FPSO-type legal frameworks into play

    • Which national legislation, flag state regulations, class rules and international conventions apply?

  • FLNG approvals similar to those for LNG vessels

  • Some legal issues can affect design

    • Ship vs. static facility?

    • Is the vessel transporting gas?

  • Fulfilling Domestic Market Obligations

  • Local content requirements


Flng s next steps
FLNG’s next steps

  • Small-scale FLNG’s needs

    • Appropriate stranded gas resources

    • Project sponsors

  • Large-scale FLNG remains domain of international oil companies

    • Deep engineering, project development and financial resources

  • Downturn could induce a pause in development

    • Changing economics

    • Evaporating sources of financing

  • On the positive side..

    • Construction costs are falling

    • Shipyards looking to fill order books


805 THIRD AVENUE TEL: +1 (212) 230-2000NEW YORK, NY 10022 FAX: +1 (212) 355-0295USA EMAIL: [email protected]


ad