FLNG

TPG4140 Natural GasNTNU - Trondheim November 2013 FLNG – Floating Liquefied Natural Gas An evolutionary way to unlock stranded and marginal gas fields. CADEI Luca MONTES Massimo MORLACCHI Riccardo SARTORI Matteo SPAGNUOLO Marco i ABSTRACT Natural gas will play a central role in meeting the world’s increasing energy demand in the upcoming decades. One possibility of trading natural gas is in the form of liquefied natural gas (LNG) which is currently representing almost 30% of the imported natural gas worldwide. One-third of the gas reserves in the world are located in offshore, remote gas fields (BP, 2009). In many cases these gas reserves are considered to be stranded. In fact, where the gas field is located far from the shore, the transport via a pipeline may not be a technical-economic feasible solution. As a consequence there is growing interest to unlock and monetize these reserves with floating facilities capable of liquefying and storing natural gas. Floating production platforms imply a blend of technology from land-based LNG industry, offshore oil and gas industry and marine transport technology. These new technical challenges need to be deeply investigated to overcome the new constraints raised from the offshore operability. The aim of this paper is to review the current status of FLNG projects, to highlight the technical challenges and the main risks that this new technology addresses, as well as the economic, political and environmental aspects. ii LIST OF CONTENTS ABSTRACT ......................................................................................................................................................... ii LIST OF CONTENTS .......................................................................................................................................... iii Chapter 1 - INTRODUCTION ............................................................................................................................. 1 1.1 - Background .......................................................................................................................................... 1 1.2 - A potential break-through: FLNG ......................................................................................................... 1 Chapter 2 – THE TECHNOLOGY ......................................................................................................................... 3 2.1 – FLNG facility ......................................................................................................................................... 3 2.2 – Technical challenges ............................................................................................................................ 6 Chapter 3 – RISK AND SAFETY ........................................................................................................................ 11 3.1 – Risk allocation .................................................................................................................................... 11 3.2 – Safety analysis: HSE ........................................................................................................................... 12 3.3 – How the safety is ensured ................................................................................................................. 12 Chapter 4 – ECONOMIC ANALYSIS .................................................................................................................. 14 4.1 – FLNG in the Market............................................................................................................................ 14 4.2 – FLNG to onshore LNG economic comparison .................................................................................... 15 4.3 – FLNG project structures ..................................................................................................................... 16 Chapter 5 – POLITICAL IMPLICATIONS ............................................................................................................ 17 5.1 - Political issues concerning Prelude project ........................................................................................ 17 5.2 – Political issues concerning Greater Sunrise ....................................................................................... 18 5.3 – Main political aspects ........................................................................................................................ 19 Chapter 6 – ENVIRONMENTAL IMPACT .......................................................................................................... 20 6.1 – Environmental footprint comparison between FLNG and onshore LNG plant .................................. 20 6.2 – Main environmental benefits ............................................................................................................ 22 Chapter 7 – DISCUSSION ................................................................................................................................ 23 Chapter 8 – CONCLUSIONS ............................................................................................................................. 25 REFERENCES ................................................................................................................................................... 26 TABLES............................................................................................................................................................ 32 FIGURES .......................................................................................................................................................... 35 APPENDIX ......................................................................................................................................................... 1 Appendix A – DMR options for FLNG liquefaction process ........................................................................... 1 Appendix B – Overview on Prelude project .................................................................................................. 1 iii Chapter 1 - INTRODUCTION 1.1 - Background Demand for natural gas continues to increase and it is rapidly becoming the preferred fossil fuel for several applications. Forecasts assert that the use of natural gas could rise by more than 50% by 2035 1. The main growth of demand is occurring in East Asia; on the contrary, the EU market does not show a definite trend. (International Energy Agency, 2011) LNG has become the main alternatives to transport natural gas for long and remote distances. It avoids the construction of new uneconomic pipelines and it changed the natural gas market from a confined one, as it used to be, to a global one 2. (BP, 2009) A large proportion of the global natural gas reserves are stranded, that means located remote from the markets, or marginal, where the field is too small to justify a gas pipeline (J. S. Gudmundsson, 2010). These offshore medium or small-size gas fields, that is to say 1 to 3 trillion cubic feet (tcf), are numerous in Australasia and in Gulf of Guinea 3. For these reasons, several petroleum companies in the world are dealing with a way to take advantage of LNG technology to exploit the one third of world gas reserves, which are located offshore: this innovative conception of the offshore plant is called FLNG, as acronym of Floating Liquefied Natural Gas (Finn, 2009). 1.2 - A potential break-through: FLNG The overall purpose of an FLNG facility is to produce LNG directly on an offshore floating plant, developing a remote gas fields or associated gas of oil fields under production. The entire FLNG value chain is thus shorter than a typical LNG supply chain; in fact, an FLNG plant might enclose, in one single structure, the upstream facilities, the transportation via pipelines to onshore plants, the treatment, the liquefaction, and the export processes. On the other side, the above mentioned procedures would be separated in a conventional LNG supply chain 4. (Michelle Michot Foss, 2007) Floating LNG production, storage and offloading concepts (LNG FPSOs) have some advantages over conventional liquefaction plants for offshore resources. The most important one may be the ability to station the vessel directly over distant fields thus avoiding expensive offshore pipelines, not economically feasible while developing marginal, small gas field and the possibility to move the 1 Figure 1 - World Energy Demand (1980-2035). Figure 2 - Major trade movements. 3 Figure 3 - Undeveloped offshore gas fields in Australasia in 2007. 4 Figure 4 - LNG & FLNG value chain. 2 1 production facility to a new location once the existing field is depleted. (A. Kheradmand et al., 2010) From the late 1990s some big oil companies (Shell, Exxon-Mobil, Statoil, and some European research groups) are developing FLNG concepts for remote locations, such as Nigeria, Australia and Namibia (ENI, 2005). These companies are considering two models with different aims, relevant to FLNG’s future growth: • small scale plant, suitable for small stranded gas reserves, previously delayed because they were considered uneconomic for conventional land-based facilities; • large scale plant, which is a means to avoid long distance submerged pipelines to the shore, enhancing the prospects for fields where traditional LNG development would involve a lengthy or difficult feed gas pipeline. The size of the plant and its storage capacity are related to the need for treatment of the feed gas composition and the intended processing capacity 5 (I. Kerbers and G. Hartnell, 2008). A unique and demanding set of technical challenges must be overcome to move LNG production to an offshore setting, ensuring at the same time the safety of marine environment and workers. These problems are primarily due to the changing and sometimes harsh marine environments in which the facility has to operate and to the lack of space on the hull. (I. Kerbers and G. Hartnell, 2008) Today, all the considered technologies in the FLNG are either mature or under qualification, and the economic situation justifies a renewed interest of the operators, so it is no surprise to see several initiatives launched on the subject of floating LNG. However, some political issues still need to be solved. (B. Mauriès et al., 2009) 5 Table 1 - Small and large scale FLNG. 2 The technology in use on existing Oil and LPG FPSOs means that nowadays there is a body of experience for a large number of already proven components that will also be applicable for an offshore FLNG installation. condensate and PFW. to which the following description refers to. Finally. PFW needs treatments 6 Figure 5 . When these liquids may form slugs. consisting of gas. compared to available liquefaction processes used in onshore LNG plant.FLNG facility. The production fluid is therefore transported to the riser base manifolds. Upstream infrastructure The upstream infrastructure includes the production wells. from which the subsea flow lines start. ease of operation. The flexible risers should be designed to accommodate the motions of the FLNG facility on the ocean surface. 7 3 .Gas-treatment. LPG and stable condensate as by-products. 8 Figure 7 . The additional constraints such as vessel motion due to marine environment also requires a high degree of modularity. where the gas-treatment starts8.Upstream infrastructure. Some liquids are typically removed in a separator by gravity. quick start-up and high availability. and the transportation system to deliver it on the FLNG facility. depending on feed gas composition. (DNV. the process plant needs to be protected by installation of a slug catcher at the inlet of the plant. 2009) The FLNG facility should be designed according to the Offshore Technical Guidance. However. (Shell. the flexible risers transport the fluid to the turret of the floating structure. 2011) Receiving area The feed gas is thus delivered from the turret to the receiving area. The entire plant comprises the upstream infrastructure 6 and the FLNG facility itself. which are installed on the seabed adjacent to the FLNG facility.1 – FLNG facility The overall purpose of an FLNG facility is to produce LNG and. which requires a compact design and a weight control. which extract the fluid. low equipment count. The various parts of the process are then located topside and distributed as modules that are installed on the deck 7.Chapter 2 – THE TECHNOLOGY 2. Figure 6 . A typical design for this latter technology is to base the installation on an LNG carrier hull. condensate and Produced Formation Water (PFW). The wells are completely subsea and a platform is not required: the wellheads are connected directly to the subsea production manifolds. light and with higher inherent process safety. The receiving facilities typically comprise equipment for separation of well fluids into wet gas. offshore alternatives need to be more compact. In this process. (DNV. In this area. (DNV. The removal of these gases is often referred to gas sweetening. However. Solid bed dehydration is seen as the preferred alternative due to the low outlet water dew point and its effective capacity. a unit regenerate the Mono-Ethylene Glycol (MEG). Clearly. with the associated economic benefits. the internal filling with molecular sieve needs to consider the movement of vessel and vibration during offshore service. a more effective treatment is necessary for an FLNG in order to obtain the very low water content (0. which consists of an absorption into a solvent. This requires a system for mercury removal to prevent the potential damages related to corrosion. 2011) Gas sweetening Natural gas may also contain sour gases. typically an amine solution. which is injected to prevent the formation of hydrates in the upstream infrastructure. since it 4 . that may represent a corrosion hazard or hinder the liquefaction processes. The gas is routed to the AGRU (Acid Gas Removal Unit). H2S and CO. the cooling and the turbo expansion of the feed gas enable the separation of a part of the streaming flow. However. (DNV. The process is an adsorption on a bed containing sulphur-impregnated activated carbon. which is recovered as condensate products (C5 +) and LPG (C3-C4). The amine process involves an absorber column and a stripping cycle where the absorber is freed from the “recovered” gases. FLNG cause a relevant reduction in the use of MEG. the processed and dried gas still has heavy components which have to be removed in the NGL (Natural Gas Liquid) extraction unit prior to the liquefaction. 2011) Fractionation Once the gas has passed through the gas treating units. 2011) For liquefaction processes using aluminum as a material in the process system (typically heat exchangers). choosing a proper process cycle is of fundamental importance. in order to meet LNG product specifications. limits would also be set for maximum mercury content in the gas. while the condensate fraction is stabilised and drawn off to storage. Whereas the most common dehydration method used on oil FPSOs is an absorption glycol contactor process. 2011) Dehydration and mercury removal Water vapor needs to be removed to prevent later freezing and formation of hydrates during the liquefaction process. such as CO2. 2011) Liquefaction The liquefaction unit is the heart of the topside process and is a close variant of the available onshore options.before being discharged into the sea. such units are unaffected by vessel motions and have a relatively small footprint. (DNV. moreover. (DNV.5 ppmv) that is required for the low temperature needed for liquefaction of the natural gas. For FLNG. easily 5 Million Tons Per Annum (MTPA) or more. (DNV. in which the precooling circuit is a propane system or the Dual Mixed Refrigerant (DMR). suitable for processing about 1-2 tcf of natural gas over a 20 year life. The DMR process replaces the pure propane with a second mixed refrigerant. which significantly reduces the propane inventory on the FLNG vessel. improves the overall process power efficiency. due to FLNG vessel constraints. the primary effect of motion is on two-phase fluid flow. The selection of the liquefaction process is influenced by some main features: • Process efficiency. with its use of solely gaseous refrigerant. • Refrigerant type. The C3MR and DMR cycles have similar high efficiencies. The N2 recycle process has the advantage of using entirely non-flammable refrigerant. such a large capacity may not be feasible for FLNG. • Production capacity. It uses a coil wound heat exchanger for precooling. and this motion creates acceleration forces and mechanical fatigue having both to be accounted for in the equipment and process design. The efficiency of the N cycle is somewhat below the various MR cycles.  Precooled mixed refrigerant such as the C3MR. The precooled MR cycles have the largest production capacities. as well as liquefaction and sub-cooling. The N2 recycle process. but it is still less efficient than a precooled MR process. For any MR refrigeration cycle. 2012) for a floating application are:  Single Mixed Refrigerant (SMR). This reduces the attractiveness of the C3MR process for FLNG service. The process uses the reverse Brayton cycle to refrigerate. due to the ability to match the MR boiling curve to the feed condensation curve.determines the equipment requirements for a large section of the FLNG facility and has a great impact on the overall vessel design. called HN. The FLNG vessel presents a moving platform for the liquefaction process and its associated equipment. However. The other process cycles are all limited to about 1 or 2 MTPA per train. there may be a preference to minimize the flammable inventory in the refrigeration circuits for safety reasons. avoids the process effects on two-phase flow . that uses instead a warm mixed refrigerant. 5 . 2011) The main cycles that have been studied (Air Product and Chemicals.  Nitrogen Recycle (N). • Impact of vessel motion. The lower efficiency of the N2 recycle process can be improved nearly to that of the SMR cycle by the use of a separate precooling circuit such as in the HN process. The high efficiency of the precooled MR process makes it a good candidate for FLNG development. A separate HFC precooling circuit. there are many options 9 that allow the process to be tailored to the owner’s specific needs and situation”. the SMR process due to its simplicity. in order to remove the excess of nitrogen. 2012) End-flash and storage Once the gas is compressed. in particular aero-derivative gas turbines 11. the N or HN process due to elimination of flammable refrigerants and insensitivity to FLNG vessel motion. the FLNG facility needs some ancillary systems 10. in fact. DMR. Within each processes. Dr. Table 2 . states that “These processes and equipment have undergone significant marinization work to be qualified for FLNG service. steam driven systems or a hybrid system based on electricity production from gas turbines and steam from waste heat recovery. Justin D. prior to being offloaded to a tanker. 2011) Ancillary systems Obviously. a unique and demanding set of technical challenges must be overcome to move LNG production to an offshore setting. mainly due to the energy required by the compression in the liquefaction process. most of the planned solutions are adaptations of technologies currently applied in onshore liquefaction. To produce it. 11 Figure 8 . Lead Process Engineer of Air Product and Chemicals. Typically. an important one is the power generation system. However.DMR options for FLNG liquefaction process. 2011). 2. The resulting LNG. (DNV. diesel or electric engines may be used (DNV. (Air Product and Chemicals. During the commissioning process and as an emergency power system. As a result of the studies. 2011). SMR and N or HN LNG processes have attracted great interest for FLNG: the DMR process due to its high efficiency and large production capacity in a single train. the condensate and LPG from the process trains is transferred directly to dedicated atmospheric pressure storage tanks in the hull of the FLNG facility. 9 Appendix A . 10 6 . as well as its reduced propane inventory compared to C3MR. the power demand ranges from 100 to 250 MW.With consideration of the foregoing.PGT25+G4 gas turbine.Ancillary systems. and all known issues have been solved. primarily due to the changing and sometimes harsh marine environments in which the facility has to operate and to the lack of space on the hull (DNV.2 – Technical challenges The required technology development to move a LNG production facility on a floating structure are evolutionary rather than revolutionary. many solutions has been proposed such as gas turbines. Bukowski. it is then flashed to atmospheric pressure. at a temperature of -162°C. liquefied and sub-cooled in the cryogenic heat exchangers. The storage system must be also capable of withstanding the possible damage due to the harsh environmental condition that can cause sloshing in partially filled tanks. such as corrosion allowance. 2011). compared to a static onshore plant. to support the heavy topside. protective coatings or cathodic protection (DNV. Figure 10 . occurring during the service. Containment system design Current designs for FLNG terminals generally propose containment systems developed for the marine transportation of LNG and indicated by the IGC code (International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk). on an FLNG plant. As problem related with fatigue. furthermore. then by applying specific expedients. In fact. 7 . 2011). represents a potential serious source of downtime if not handled properly. are stricter than for a trading carrier (DNV. continuous operation offshore.Fatigue screening around turret area of a floating unit. The total volume of the LNG storage capacity has to be carefully projected a little bit larger than the volume 12 13 Figure 9 . repairable in situ in order to maintain the production rate. the design fatigue factors for an offshore vessel. corrosion ones. a design for motion is required12. from activities on board. Wave motion should not be allowed to affect the performance of process equipment. for the entire life of the gas field (20 years or more) imposes a proper design in order to avoid the need for in-service repair or replacement. for example. fatigue damages. from sloshing in storage tanks.Design considerations LNG offshore operations impose additional structural loads arising. are one of the most important structural flaws that need to be assessed during the design of a FLNG facility. and. typically without dry-docking. pitting and galvanic corrosion. not supposed to dry-dock. In addition. The structure integrity of the hull can be achieved first by a proper design and choice of materials. One of the main features that have to be considered designing a containment system is the presence of a secondary barrier. To minimize these. For this reason. with a focus on the special working condition of a floating offshore processing facility 13. This is particularly relevant for fatigue and corrosion considerations (DNV. 2011). and operation in harsh marine environment lead to high potential corrosion rates compared to a trading LNG carrier. accidentally. and preventing the hull structure from being cooled to an unsafe level. reliable and. from ship to ship mooring during LNG transfer. The forms of corrosion that could occur are general corrosion. In this case containment system has to be strong enough.Containment tank type. providing a temporary containment in case of leakage. Frequent change-out of water in ballast tanks to accommodate production and offloading procedures. from topsides loads. LNG transfer system The ability to transfer LNG between two floating structures is one of the key technologies. but is allegedly more expensive. Bunnag et al. To reduce the influence of sloshing.of designated LNG carrier. In the side-by-side technology it could be used either rigid arms with extended envelopes and assisted connection or aerial hoses. Three main types of tanks are well known and applicable for FLNG containment system 14.. making this tank solution suitable only for very small scale (DNV. still under development. in order to have further available space to continue production in case of delays or if bad weather prevents offloading. 14 15 Figure 11 . 2011). necessary to support a FLNG operation. while the main disadvantage is the large impact loads due to sloshing when the tank is partially filled. Moreover. 2011). The transfer operation of the LNG is performed through a rigid connection between the arms located on the side of the FLNG and the carrier’s midship manifold.Most suitable containment system for FLNG. 8 . The regular availability of such a system can make the difference for the economic viability of a FLNG project. • The spherical tank Moss-type B. Aronsson. allowing the periodical offloading of the LNG produced (DNV. due to the limited experience. and prone to structural fatigue (DNV. can emphasize the impact loads.Side-by-side transfer system. The absence of an internal structure. The operation is normally supported by tugboats. the impact pressure is small due to the spherical design of the tank. (E. thanks to the internal structure that reduces liquid motions. Low utilization of hull space leaves less deck space for process equipment. Even though sloshing can be relevant using this option. large tanks can be replaced by smaller tanks arranged in parallel rows (DNV. The current technology considers two main categories for the design of an offloading system. • Self-supported prismatic tank type B is not sensitive to sloshing during partial filling. 2011). which could reduce movements of fluid. Figure 12 . 2012). • The membrane tanks. • Side-by-side transfer 15 is carried out by a shuttle tanker temporarily moored alongside the FLNG facility. 2011). Calm weather and sea are required for this offloading system since the loading arms do not allow for a wide range of relative motion. the selection of a containment system is also limited by the space on the deck to accommodate the topside plant (M. The main benefit of this system is the high exploitation of available space. 2011). • Turret mooring. and it is generally arranged in the front part of the hull structure. such as the high sensitivity to the sea condition. chain stoppers could be positioned on deck level (DNV. The choice of the most proper offloading system has to take into account many aspects. Moreover. 2012). Aronsson. where the vessel is constrained in one direction. and there are a lot previous experiences of this system from LPG FPSO. Therefore.Spread mooring system. it is fundamental for FLNG technology to have reliable operational capability.Tandem transfer system. (E. manoeuvrability may be helped by use of tugs or dynamic positioning capabilities for the shuttle tanker. it is possible to make a connection to midship manifolds using floating hose solutions. thus the operation of offloading is permitted even in the presence of significant waves. On the other hand. The 16 17 Figure 13 . the mooring system has to be carefully selected. However. submerged hoses. To obtain this effect the system is composed of a fixed turret column supported by a structure via a bearing arrangement for free rotating around the turret. This technology is also proved and already used. in addition. floating hoses. there are still some challenges to solve. which limits the window of offloading for many locations. and motion compensating structures incorporating rigid arms. However. which minimizes the cost. 2011). 9 . where the vessel is free to weathervane. It is composed by 3-4 mooring lines at each corner of the vessel. The main benefit of tandem transfer is the less influence from relative motion between the FLNG and the shuttle tanker. There are normally two common types of mooring arrangements for permanently moored offshore floating production units in use today (DNV. the tandem transfer arrangement requires dedicated tankers and. however. this solution can cause a large and dangerous increase of the weight of the facility (DNV. considering the local environmental situations and the working conditions. and the complexity of navigation in open water. a suitable separation distance between the two vessels in order to obtain the highest level of safety.• Tandem transfer system 16 provides a hawser line to connect the vessels and is performed from the stern of the FLNG to the bow of the shuttle tanker. 2011). Mooring system Given the environmental and weather conditions in the target field. In order to consider the large forces and loads involved. The side by side transfer system allows using the existing manifold without the project of dedicated vessels. 2011): • Spread mooring17. There are several different tandem technologies available like aerial hoses. Figure 14 . It is possible also to use other less common options to maintain FLNG in location. These aspects make a FLNG facility more suitable to process a stream with low levels of inert gases and impurities. In this case. it seems likely that the early floating liquefaction ventures will confine their attentions to sweet gas reserves in relatively calm marine environments. The turret mooring system is a proved system in the FPSO sector. 18 Figure 15 . Gas pre-treatment operations can be expected to take up as much as 50% of the available deck space on a floating production facility. 19 10 . we can distinguish between internal 18. enabling continuous operations in moderate-to-harsh weather conditions. external19 and turret mooring with thruster assistance (DNV. while the difficulty of removing and treating hydrogen sulphide offshore drives the tolerance for this impurity to near-zero. These technologies could be applied in working condition. The technical challenges mentioned above are demanding. Even streams inlets with high nitrogen should be avoided. While these liquids classically represent a valuable supplemental revenue stream for onshore LNG developments. processing and storage obligations they impose on the floating facility (DNV. The carbon dioxide must be completely removed within a single-step operation. both to avoid the installation of nitrogen rejection equipment and to maximise available liquefaction capacity.turret supports the mooring system. The turret allows FLNG facility to adopt the direction of the least resistance against waves. 2011). wind and currents (M.Turret mooring system.2011). like the dynamic positioning or the berthing alongside a fixed or floating jetty near the shore 20. and it allows FLNG to freely weathervane 360 degrees. this limits the range of gas reserves that might be suitable for floating liquefaction. The spread mooring system could be applied at the beginning of operation and with calm and regular weather conditions. their revenue benefits are offset in offshore settings by the increased complexity.. depending on impurity levels in the feed gas stream. Ha et al. 2013).Types of mooring system. Floating LNG is also restricted in the levels of condensates and LPGs that can be directly handled aboard the vessels.Internal turret mooring system. Lack of space on the hull A floating vessel requires a compact design of the equipment and a weight control. Clearly. 20 Table 3 . K. Figure 16 . but can be exceeded. flexible risers and umbilicals. 2010). off-loading and transportation (E. Safety and Environment) problems and the risks due to the technical challenges.. which repays all the capital and operating expenditures. because a “project company” typically operates and owns the vessel. The performance and capacity of the production represent one of the main uncertainties regarding the commercial feasibility of FLNG developments. With the new framework. each one regarding the upstream. In addition.Logical scheme of risk allocation. furthermore. 2009). each of which deals with some main issues. the risk allocation is strictly dependent on the structure adopted from a wide range of contracts. McArdle. and achieves a certain target of remuneration through a fee on the processed volumes (A. Since the economic and political issues are discussed in the following chapters. White and H. Anyway. 11 . The experiences concerning the previous LNG liquefaction processes come from both LNG carriers equipped with re-liquefaction systems and other applications on LPG FPSOs.FLNG phases risk allocation. the risk allocation can be divided into techno-operational and market-economic issues. technical challenges. the midstream risks are absent due to the fact that the transportation and storage phases are combined together in the single FLNG facility. midstream and downstream phase21. legal issues closely linked with the ones previously mentioned should be taken into consideration (J. Skramstad et al. The innovative nature of the FLNG technology commissioning is one of the main causes of uncertainty. Traditionally. 2011). but not entirely applicable due to the complexity in LNG production processes. economic and political issues. Oil FPSOs basic experiences are significant.Chapter 3 – RISK AND SAFETY 3. Figure 17 . the next paragraphs include only the HSE (Health. This fact implies the search for new risk-solutions about production. the downstream is protected from the off-takers risks. It is then reasonable to neglect both the gas production phase and those ones after the offloading process in order to define a comparison with the traditional onshore technology. El Mazni. The risk analysis can be divided into four sections.1 – Risk allocation The new framework of the FLNG value chain implies the risk reallocation associated to each stage. 21 22 Table 4 . The distribution of the risk for FLNG solutions is reported as following 22: Health-Safety-Environment. 12 . even leakage (Zhao. Kolodziej et al. 2009). intoxication. the induced sloshing of LNG. 2004. which can lead to ships collision (E.2 – Safety analysis: HSE Safety is one of the most important factors to consider during the design of a FLNG plant. The harsh oceanic conditions and harmful fluids used could cause harm to the workers. Kheradmand et al..3 – How the safety is ensured The imperative for ensuring the safety is to act in accordance with a correct project design. The most hazardous risks regard hydrocarbons treatment. corrosivity. In addition. low temperature (brittle fracture) and high pressure (Harish N. 2008) and may cause escalations to fire or explosion because of their flammability. Risks are evaluated early in the selection of the design and minimized by a Concept Risk Assessment (CRA). the treatment of BOG and LNG spills and vapor dispersion caused by accidental release is another challenge for ensuring safety. BOGs are usually treated either by reliquefaction thus re-storage.. and during the mooring of LNG carriers. 2010). that means to use a building block approach. mixed hydrocarbons. Kolodziej et al. Kerbers and G. 2009). J. Several unexpected events might occur in that process: the fluids used as refrigerants (propane. the large use of nitrogen may involve asphyxiation risks for the workers (Dr. the plant equipment and the marine environment. 2012). Bukowski et al. It is thus possible to derive both the 23 Figure 18 . First. reactivity. or by using them to fuel the power system. could compromise the integrity of the tank and cause insulation problems.. A complete HSE analysis should involve hydrocarbons and non-hydrocarbons risks (E.3.. equipment damage and fracture on the ship structure. Justin D... hull damage and. 2011). in the worst-case. A malfunction in this process and an unexpected leakage could cause fire and explosion incidents. J. Secondly. which may occur during marine or helicopters transportation. A. 2010). which combines frequencies and consequences of the undesirable events to calculate their associated risks23.Concept Risk Assessment methodology. workers are subjected to non-hydrocarbons risks. which is basically a liquid movement within the cargo tank really hard to predict. because of BOGs’ toxicity. Patel et al. Hartnel. A process that minimizes the usage of these fluids will be more favorable to the stakeholders (D. nitrogen) could pollute the marine environment (I. 3. Franklin et al. The main issues regarding the safety of the plant occur in the storage phase and in the treatment of BOG (Boil Off Gas). more maintenance and inspection during the entire life of the plant. Kolodziej. The system is based on several layers of protection: primary and secondary containment (safe design concepts).. and FLNG Emergency Response 24 (American Bureau of Shipping. Active and Passive Systems (relief devices).LOPA Framework for FLNG Process Topsides. 2011). Process Module Shut Down. 24 25 Figure 19 . 2009).Topside view of a FLNG plant. fatigue and corrosion issues. Basic Process Control Systems.. Engineers proceed in the development phase by taking into account ALARP (As Low As Reasonably Practicable) and Risk Tolerance Criteria.related Personal Risk Exposure Per Annum and Cumulative Risk Factor (Chevron Energy Technology Company. The special oceanic operating conditions require more attention on the material selection. WS Atkins Inc. 13 . The plant modules are located from the vessel bow towards the aft following the process flow with a 15 meters spacing between them and keeping dangerous equipment at a security distance from the accommodations. and the need of providing an adequate training for the workers (Harish N. The FLNG topside modules are arranged in a way that can guarantee the lowest technological and HSE risk. due to stress. while a blast shielding system is used in order to mitigate any risks from the turret swivel and the high-pressure inlet piping25. 2009). Figure 20 . Alarms and Human Intervention. A secondary escape tunnel is placed under the topside deck to guarantee an escape route to 140-150 people working onboard (E. Patel et al. such as Safety Instrumented Systems (fire and gas detection).J. The accommodations are placed at the bow and the flare at the stern. 2011). and safeguard and emergency systems. Douglas-Westwood shows in its World FLNG Market Forecast that expenditure is set to B$47. 2013-2019. and bring to a further economic decline. 26 Figure 21 . In this regard. due to the lingering European debt crisis: the crisis could weaken the investments and reduce the potential market growth in the short-medium term. B$28 of which spent on FLNG liquefaction. Dormer. the topside design denotes one of the most important technical-economic optimization procedures which should also include the failure risk expenditure in a Life Cycle Cost investigation. 14 . many operators and stakeholders are taking a keen interest in the success of the first critical projects. the highest peak of B$9. However. impacting on new E&P activities (M. 2009).1 – FLNG in the Market Gas is becoming more and more valuable in the last years. the debt crisis could also reduce the demand and prices. If the reserves and markets are not the limiting factors. 2013). Dormer. two significant risks might affect even more the FLNG sector. (M. Verghese et al.Chapter 4 – ECONOMIC ANALYSIS 4. where the total global Capex was set to B$3. Dormer.4 over the 2013-2019 period 26. This value is very high if compared with the 2008-2012 period.000 per t/y of LNG capacity. some concerns have recently affected the increase in the cost of onshore terminals: the lack of infrastructures in some places and the increasing cost of the labour and materials are just few of these worries. In particular. topside. while the expenditures for export jetty and spur line are theoretically estimated at $150 million and $20 million respectively. due to various events such as an increasing desire for gas assets monetization and a more stringent legislation about emissions.7 will be reached in 2017. 2013) Total global capital expenditure on FLNG facility is expected to increase over the next period. The development of FLNG projects is made possible thanks to the capability to deliver natural gas from the source to the market at a value chain cost below the price of the gas that the market can allow during the life cycle. the successful execution and operation will encourage new projects whereas a failure could represent a permanent fall for the industry (M. On the other hand.Global Capex on FLNG facilities by region. 2013). the netback price from the market to the plant will drive the progress of the project (J. spur line and export jetty should be outlined on the basis of last estimates (J.. As a result of the outlined capital-intensive nature of FLNG projects.S. So. 2013).. moreover. Plotkin et al. more than three times the Capex value reached in the last five years. industry figures suggest values of Capex for FLNG plants ranging from $700 to over $1. a total cost of B$3 for the vessel. In fact. For instance. Gas reserves distribution and exploitation. 2009). El Mazni et al. Anyhow. This aspect is relevant. 2013). land use and royalty issues typical of onshore plants (PRNewswire.. 2013). El Mazni et al. Hartnel.. This is a main issue that involves the FLNG topside complexity. Bunnag et al. it has been estimated that the FLNG plant might reduce the costs of a comparable size onshore project up to 20-30% and even a reduction of 25% in term of time required for the land acquisition might be expected (L. safer and thus more economical (M. the exploitation of smaller gas fields down to 1 tcf is a lower threshold if compared to traditional developments (A. a new FLNG concept that it is supposed to be cost-competitive for large lean-gas fields (M. Even if the commercial drivers of an FLNG project for all the value chain segments must be aligned to those of an onshore LNG project to ensure a fruitful business (J. by processing and liquefying natural gas offshore. some fields contain lean gas that will not provide the benefit of condensate and LPG revenue stream.. considering the large amount of gas stored in small fields 27. In fact. Nevertheless. This is the reason why Shell saw a strategic opportunity and decided to develop FLNG Lean. Kerbers and G. if the market accepts rich feed gas. Anyhow. it is sure that the plant might provide higher flexibility in gas resource developments and lower costs of production link. 2013). towering the onshore developments. 2008). 2009). The floating liquefaction has been proposed as an economically valuable solution to transform stranded gas into money. Plotkin et al. some important issues have caused the growth of interest on the FLNG technology. lean LNG is required in the UK’s markets. This represents an encouraging tool for small operators that are willing to acquire and develop new offshore gas reserves (B. the main reason of the economic feasibility of the entire project remains the profitability of the upstream segment (A. 2011). For instance.S. the discussed threshold is comparable to other technologies applied to even smaller 27 Figure 22 . Edwin et al. FLNG represents a recent solution that could bring several economic advantages. As a matter of fact.N.2 – FLNG to onshore LNG economic comparison In the recent years. the pre-treatment process that also produces LPG offshore will be unnecessary and the topsides will be simpler. 2011). These two main advantages lead to lower capital and restoration/abandonment costs. and it represents a further advantage that could provide additional revenues. 15 .. this new technology is in the first stages of its development. van Dongen. 2011). FLNG concept has solved also environmental. 4. Moreover. The most obvious of these are both the possibility to avoid expensive offshore pipelines and the capability to transfer the production to a new location once the considered field is depleted with a limited downtime (I.LNG markets have various gas specification requirements depending on the countries. whereas in the Japanese market rich LNG is accepted... Mauriès et al. Moreover. (J.54 tcf) and natural gas hydrates (0. This model requires strong players and implies high downstream risks. which covers operating costs and the equity return. therefore. they are responsible also for arranging the shipping of LNG to the customers. 4. since methanol projects are not normally going to be able to compete with LNG to access the market (Mark Sutton) and since the hydrates technologies are not economically competitive. the fee is typically composed by a fixed fee for minimum volume. White and H. the upstream participants prevent the FLNG operating risks. Anyhow. The benefits of reducing this practice may have a positive impact on the environment and even on the health of the surrounding communities (CompactGTL plc.3 – FLNG project structures Several business models (Poten & Partners) or basic project structures (Baker Botts LLP) could be adopted for FLNG. For example. which usually can result in a loss of money.S. assets and services for developing and operating the field. which processes the gas and markets the LNG on its own. that means producing. The reduction of this process denotes an extra-decrease in the cost of the operations. FLNG represents one of the best solutions to drastically reduce flaring. the project company takes the commercial benefits and risks related to marketing LNG. a hybrid model would be preferable since it also involves upstream and downstream activities. The three main models. This loss is due to the missed production and the penalties imposed by the various countries (such as in Nigeria). McArdle. from which others hybrid could be arranged. 2009) • A merchant project (or project company model). In this case. which covers debt costs.stranded-gas-field size.. Each model has its advantages and disadvantages. where the owner of the FLNG facility receive a capacity fee from the gas producer for providing the services of processing. 2010). liquefaction and storage. Gudmundsson. White and H. thus offers more rewards. White and H. 2009) • A tolling model. the FLNG remains currently the most tangible solution. McArdle. and a variable fee depending on the volumes. (J. 2010). are: • An integrated model. McArdle. liquefying and marketing the natural gas. which is the most adopted model for on-shore liquefaction facilities. (J. 16 . Kelbers et al. the gas resource owner deals with the extraction of gas and sells it to the FLNG facility. where the gas resource owners or the upstream participants of a FLNG marketing company build and own all the facilities. In this model. 2008). in a tolling model the returns from the only gas processing may not be enough to repay the FLNG developer’s investment and technical risk. benefits and even risks (I. 2009).. such as the contractual risk and price fluctuations. Therefore. such as methanol-FPSO (0.38 tcf) (J. pushes to keep Browse gas project onshore since it would provide more benefits both to the region and to the local community of James Price Point: “No other country in the world would allow its energy resources to be developed in offshore construction. It is not a question of whether it's a floating or an onshore project. 2013). 2013).”(ABC News. In fact.” (The Australian. it is required a project which is profitable. 2013).1 . is another problem the project implies. In the end. The jobs are gone. The gas is gone. Australian government main interest is to secure from this project as much benefits as it can to boost Western Australia economy. which is feasible. 2013).Prelude’s project. a former Woodside executive: “It is unfortunate the gas will not be processed on West Australian shores. 17 . On the other hand. where the Prelude will be located.” (The Australian. Western Australian government. headed by Prime Minister Colin Barnett. As a matter of fact. “An onshore project in Western Australia was just not possible. which is the first FLNG facility that will be developed off the shores of Australia. the commonwealth’s main interest is to succeed in developing the gas field as stated by Federal Resources Minister Gary Gray. leaving Browse joint venture with little choice but to pursue the floating option if the project was to be constructed at all (Business Spectator. loaded and sailed away. The benefits for local business have gone. it is whether it's floating or it’s no project. while Oil & Gas companies’ main interest is to follow the most economically viable solution. The power balance between the states and the commonwealth.Chapter 5 – POLITICAL IMPLICATIONS 5. with floating projects paying only federal royalties and sidestepping state ones. 28 Appendix B . it is vital it is extracted. The benefits for the Aboriginal people have gone.Political issues concerning Prelude project Political issues such as job opportunities creation and local communities’ growth are the main problems related to FLNG technology development. Tom Adolph. flourishing US shale gas market and technology enhancements have made Australian gas too expensive to be sold. is used in this paper as an example for a better understanding of the previously mentioned matters and others related to them. The companies’ concern is to pursue the most financially profitable solution and Prelude floating project seems to be the only one so far. The onshore option was never financially viable. Prelude project 28. Australian government and Browse joint-venture partner are the two main characters involved in the development and exploitation of the Browse basin. On the other hand.The development of an onshore facility is the solution that would undeniably provide more paybacks to Western Australia. job opportunities in outer sea would be very less attractive to local communities of Australian coast. in terms of job opportunities and contracts. the budget required to build an onshore plant would not repay the O&G companies’ investments. Shell’s strategy is to hire locally.2 – Political issues concerning Greater Sunrise The Greater Sunrise gas fields region is another FLNG possible future development area whose political situation is at stake. an FLNG training program. Pickard. for our business and those jobs will exist here in Perth to support the floating industry” (Ms. 2013). Nevertheless. and despite the similarity with the former one. Even the employment places that such a facility would provide are of great importance. it emphasizes the previous statements adding some details about possible political interaction between different nations. will be greatly diminished if the floating solution is adopted: large capital invested in the floating plant construction would be moved from Australia to South Korea. As it happens. Garvey. the bedrock. with Curtin University and the Challenger Institute. “Operation and maintenance jobs should be the foundation. So. despite not making ‘any huge difference yet’. The Greater Sunrise gas fields are located approximately 450 km north of Darwin and 150 18 . 2013). These two aspects. for maintenance and operation jobs. Additionally. the reduction in number of processing infrastructures on FLNG plants leads to the necessity of fewer construction jobs which can be also relocated in others countries where workforce cost is cheaper (P. 2013). Shell Australian chairwomen. 2013). where Prelude is supposed to be built at Samsung shipyard. around the world. Wilson. as Shell Australian chairwomen point out. In fact Shell have set up. and even of greater importance. Dormer. is not to be underestimated. In addition to this. This kind of initiative will provide to Australians abundant advantages at being able to compete for jobs. an offshore facility represents a good way to avoid such concern due to their position close to the gas markets but far from the main land (M. are the operation and maintenance jobs that are going to last for 20-25 years and that do not tend to put the stress on the communities that construction jobs do. over FLNG ships. Vickery & A. As a matter of fact. local communities’ opposition may sometimes obstruct the placement of the onshore plant. which is going to involve Australian people for unique multi-year program in order to provide the first floating LNG operators” (K. form 80 to 85 per cent of Prelude’s employee. 5. as previously reported. Prelude project would bring great profits to Australia: “Ms. Pickard said it was wrong to suggest that Shell was recruiting in other countries and was committed to support the local community. the economy burst provided by the construction of a gas liquefaction treatment plant. Furthermore. but also because the technology itself is new. Jose Ramos Horta. preferring to have the gas piped to an LNG plant built on its coastline. 5. the latter is not so keen on exploiting the gas field with this new technology not only because of the same reasons the Australian Government pointed out. In 2010 the Sunrise Joint Venture selected Shell’s FLNG technology as the Joint Venture’s preferred development option. and this create a conflict of interest that may delay to gas fields exploitation development. it is clear how FLNG technology poses new problem in the exploitation of hydrocarbons resources. Ross Kelly write on ‘The Australian’. it appears to scatter Oil Companies’ capitals supposed to be invested in reservoirs’ owner country. The larger part of the basin is located in Australian waters. On the other hand. in this case. The Sunrise Joint Venture is comprised of Shell (26. Conoco Phillips (30%) and Osaka Gas (10%). it leaves uncertainties on its reliability. As for the Browse basin.4%). 19 . and nations contend for obtaining the right to build the facility on their own ground. said that he is concerned about the companies' insistence on using such an untested technology for the project. Woodside (Operator) (33. Furthermore. On the other hand an FLNG facility could be the solution that might lead the two nations to an agreement. It is also necessary to take into account that. As a matter of fact.km from the south coast of East Timor. both Governments involved would like to have an LNG facility built on their coast line.3 – Main political aspects Given these perspectives. however approximately 20% of the fields are located in a Joint Petroleum Development Area (JPDA) controlled by the Governments of East Timor and Australia who actually are the stakeholders in the Greater Sunrise gas fields. As a matter of fact. political contrasts arose between Royal Dutch Shell and East Timor Government. the growing market competition leaves no other choices but to follow this new path. Furthermore.6%). especially in local communities. It’s therefore clear how governments disapprove this kind of technology because of the earlier mentioned problems. an FLNG production plant might be the only feasible resolution to avoid the rising of political discrepancies.East Timor has consistently opposed the use of a floating LNG vessel to develop the resource. and therefore. even East Timor’s President. which straddles its maritime border with Australia. when a field is located in a JPDA. to other third parties or nations. operations of dredging. Many aspects concur to define the environmental impact of a natural gas liquefaction facility. thus preventing to affect any environmentally sensitive area. would cause significant disturbance to marine habitats. meaning the impact associated with the operational phase. subsea infrastructure and the facility itself. disruption of behavioral patterns and secondary impacts such as the increased predation and the reduced fitness. On the other hand a conventional onshore LNG plant would present a similar footprint around the offshore platform but. 2012). Nevertheless. in addition. it is necessary to consider the positioning of a long pipeline. In addition. Operation and construction footprint The physical FLNG facility’s footprint. This chapter analyses the feasibility of an FLNG plant comparing its footprint relatively to an equivalent onshore LNG plant. should only be limited to the production wells. In light of these statements is possible to assert that a FLNG facility would be environmentally friendlier even during construction phase. it has been estimated that the footprint of an equivalent LNG development could be around three times bigger than the FLNG development (Caymo & Cohen. as artificial lighting from oil and gas facilities has the potential to impact marine fauna and birds causing disorientation. a FLNG facility is supposed to be at a substantial distance from the main lands.1 – Environmental footprint comparison between FLNG and onshore LNG plant The creation of an FLNG facility unquestionably implies the establishment of an environmental footprint. 20 . The construction activities also pose potential traffic and noise. 2012). The previously mentioned aspects associated to the operational phase are broadly similar to the ones linked to the construction phase. Overall. some environmental modifications must be taken into account. sensitive near-shore and shore habitats and native animals (Caymo & Cohen. the exploitation of natural hydrocarbon resources is irrevocable and in spite of the struggle to preserve both the nature and the climate intact. On the other hand lighting form onshore plant could impact visual amenities. As a matter of fact. such as jetties and harbors. the land-take of the onshore liquefaction plant and the effect of the coastal marine export facilities. though flaring might be more intense on the FLNG at times of process upset.Chapter 6 – ENVIRONMENTAL IMPACT 6. Light emitted from the FLNG facility or offshore platform are very similar. the comparison of the two options will be schematically conducted considering one aspect per time. Light emission A further aspect that requires consideration is the light emission. especially in coastal areas. Considering modern society’s needs. an onshore solution would imply vegetation clearance and land preparation. the main source of noise would come from generators. These two aspects. since as nearly all successful introductions occur in coastal waters (Australian Government. would also occur near-shore. is more efficient than a steam driven plant and has a comparable efficiency to the FLNG facility (Caymo & Cohen. It is overall. it is estimated that the FLNG facility is 15% more efficient than a comparable steam driven. Department of the Environment. steam turbines. both FLNG and offshore platform requires piling. Thus. Considering the latter aspect an offshore platform would produce less noise. this reduces the overall risk of introducing non-native species. consequently less sensitive to hydrocarbons spill than coastal water.GHG emissions by source from the Prelude FLNG project.Predicted noise levels during non-offtake and offtake activities. while the highest noise generation would occur during the docking and the undocking phase of hydrocarbons’ carriers. the energy requirement for gas transportation is avoided. FLNG uses colder water spilled from the bottom of the ocean to feed the cooling system and this increase the refrigeration efficiency. A gas turbine driven LNG plant. Transportation system For the FLNG option. 21 . export tankers remain offshore. which can be a significant source of noise. Moreover. 2008). represent real risks for an onshore plant. Furthermore. the most common arrangement onshore. and other machinery. Underwater noise. 2012). air-cooled onshore development. CO2 also comes from the reservoir itself as part of the production 29. Underwater and airborne noise As drilling activities are similar for both cases. where marine habitats are more sensitive. on the other side. but this would mainly happen during construction phase since during operation the only source would be due to vessels activities. the severity of any impact from spills associated with transportation is also likely to be reduced as the environment in the vicinity of an FLNG plant ought to be open ocean. Water.Greenhouse gasses emissions Carbon dioxide comes in both cases from the fuel gas consumed for powering the liquefaction process and flaring. Furthermore. underwater noise generated during this kind of operation is expected to be similar30. First. 29 30 Figure 23 . Whatsoever the location of the FLNG facility offshore and near the gas field provides some advantages in comparison to an onshore plant. since gas is processed in loco. for an onshore plant. Figure 24 . so it is not necessary for them to transit the coastal ports. For the FLNG facility. Heritage and the Arts. there is a residual Hypochlorite concentration in cooling water discharged to sea (Caymo & Cohen. 6. 2012). the pipelines. This would make an FLNG ship completely reusable. minimizing the temperature impact between water discharges and seawater. the facility is completely reusable after the gas field economical life-time. In comparison. retrofitted and reused to exploit another field. Chlorine in the form of Sodium Hypochlorite is generally added to the cooling water to inhibit growth within the cooling system. The main distinguishing features of the FLNG solution are therefore:  Avoid an extensive pipeline. the cooling water requirement for offshore platform is typically lower than an onshore facility. and the onshore facilities.2 – Main environmental benefits The comparison shows that overall FLNG has substantially smaller environmental footprint than onshore LGN. would be towed away. according to the typical configuration. Decommissioning An FLNG plant. 22 . Decommissioning an onshore plant would require removal of the offshore facilities.  Reduce the material for the construction by half (Caymo & Cohen. On the other hand. Consequently. repaired. 2012). This is due to the fact that this new technology combines the traditional offshore and onshore components required for gas liquefaction into a single. after the exhaustion of a gas field.Cooling water and other discharges The FLNG facility would use seawater as coolant. The land may also require reinstatement. Moreover. integrated floating facility that can be located in an open ocean which is a less sensitive area. This seawater is taken close to the sea bottom where is colder and then is discharged close to the surface.  Eliminate the operation of dredging and land clearing.  Avoid the combustion emission in air within human reach and the artificial light emission in costal more sensitive area. but there would be no cooling water discharge from an onshore air-cooled LNG plant. as for all new projects development. 23 . Others disadvantages are the harmful fluids used on the facility. Regarding the weaknesses. is a structured planning method used to evaluate the Strengths. Moreover. Weaknesses. avoiding a big amount of costs and eliminating the technical and economic risks associated to the Midstream layer. that contend for obtaining the right to have an onshore facility built on their own ground. Opportunities. The main strengths of the FLNG technology are. two 31 Table 5 . The main opportunity that FLNG project may exploit is the global gas market trend. the creation of less job opportunities compared to an onshore LNG facility and the fact that FLNG projects tend to scatter Oil Companies’ capitals supposed to be invested in reservoirs’ owner country. it has to be considered also the threats that can cause trouble for this new business. developed by Albert Humphrey in the 1960s. These are primarily due to the harsh marine environment in which the facility has to operate. especially for long and remote distances. First. Another advantage is the possibility to move the production facility to a new location once the existing field is depleted. as we can infer from the previous chapters. The latter aspect also limits the range of gas reserves that might be suitable for floating liquefaction. LNG has become one of the main alternatives to transport natural gas. The mentioned characteristics. 2011). a SWOT analysis is now performed 31. Moreover.Chapter 7 – DISCUSSION In order to achieve a synthetic and complete summary of the FLNG technology. a unique and demanding set of technical challenges must be overcome to move LNG production to an offshore setting. the continuous offshore operations without dry-docking and the lack of space on the hull. avoiding expensive offshore pipelines. which is considered to rise since natural gas is fast becoming the preferred fossil fuel for several applications. although the technology is already proved since many onshore components could also be applicable for an offshore installation. in a competitively way considers the others alternative technologies. a successful execution and operation will encourage FLNG’s reliability. make the project advantageous if compared to onshore solutions. owners of petroleum resources across boundaries. in addition to lower environmental footprint and less impact on local communities.SWOT Analysis. we underline the fact that. and Threats involved in the development of a business venture or a project (Washington University. In particular. However. FLNG plants could be the solution leading to an agreement between nations. The SWOT analysis. it allows a drastic simplification in the LNG value chain. whereas a failure could represent a permanent fall for the industry. Furthermore. the capability to unlock stranded and marginal (down to 1 tcf) gas resources. The performed SWOT analysis is a simple but useful framework to analyze four FLNG’s aspects: strengths and weaknesses. It can be used to both summarize the results of this report and as a valuable strategy tool to evaluate the competitiveness of this new technology in the Oil & Gas industry. due to the lingering European debt crisis: the crisis could weaken the investments and reduce the potential market growth in the short-medium term and it could also reduce the demand and prices and bring to a further economic decline. 24 . impacting on new E&P activities. which relate to external factors. opportunities and threats.significant risks might affect the FLNG sector. which are internal to this technology. thus simplifying the LNG value chain.Chapter 8 – CONCLUSIONS The main following conclusions can be drawn on the bases of the previous analysis: • Economics of LNG projects are now favourable and may shortly result in the first fully offshore LNG developments. It allows the exploitation of these remote reserves avoiding the need to build a costly fixed pipeline and an onshore liquefaction plant. • FLNG offers an attractive means of monetizing stranded offshore gas resources. once the gas field is depleted. It seems likely that early floating liquefaction ventures will confine their attentions to sweet gas reserves in relatively benign marine environments. 25 . providing an increase in national gas reserves. • The capability to reallocate the facility. it can represent a reasonable solution for dispute between nations. • Though the technology is already proved. in a competitively way considers the others alternative technologies. unravels new scenarios and future developments. • Governments’ main concerns about FLNG technology are creation of job opportunities and local communities’ growth. even though it is threatened by the EU debt crisis. many technical challenges have to be overcome to integrate the complexity of these new functions on a floater. due to the bullish LNG market. On the other hand. Kennington.lib. Floating was only Browse option: Voser. Bukowski. FLNG Development: Strategic Approaches to New Growth Challenges. Retrieved on October 2013 from: http://www. 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USA.com/content/dam/shellnew/local/country/aus/downloads/about-shell/prelude/appendix.au/business/shells-prelude-project-to-be-fullof-australians/story-e6frg2qc-1226582711862 Washington University.Shell Development Australia. Australian Government. Prelude FLNG. Barend Pek. Shell’s Prelude floating gas project to be “full of Australians”. 21 February 2013. Houston. Retrieved on November 2013 from: http://www. Development Options for North American LNG Export: The Merits of Inshore Deployed FLNG for Liquefaction of Onshore Shale Gas and Examination of Principal Technology Drivers.static-shell.com. Heritage and the Arts: Environment Protection and Biodiversity Conservation Act 1999. Retrieved on November 2013 from: http://www. Challenges to be Overcome. 2 July 2013. 31 . Journal of Natural Gas Science & Engineering.dwasolutions. Retrieved on October 2013 from: https://www. Baker Botts (UK) LLP.pdf VV. 2005.. ENI & Istituto della Enciclopedia Italiana Fondata da Giovanni Treccani S..engineersaustralia. Retrieved on October 2013 from: http://www. Project Structures and Risk Allocation in a Viable FLNG Project.au/sites/default/files/shado/Divisions/Western%20Australia%20 Division/Groups/Oil_Gas/kbr_granherne_ieaust_flng_presentation. Retrieved on November 2013 from: http://www.igu. Hamish McArdle.pdf David A. Floating LNG: A Review of the Forces Driving the Development of FLNG.AA. Drivers. Wood. Enciclopedia degli Idrocarburi.org. November 2012.com/ images/LNG%20TradeGlobalReviewbyDWoodAuthorsDraftMay2012. A Review and Outlook for the Global LNG Trade. 2009.John White. Presentation to IE Aust Perth Oil & Gas Facilities Group. Challenges and Solutions for FLNG.a.org/ html/wgc2009/papers/docs/wgcFinal00494.p.pdf Nick White. laboratory 32 They include seawater desalination.0 mtpa 3. Systems Cooling water system Drainage system Waste water treatment plant (WWTP) Pressure relief system (flare stacks) Purpose Cooling medium. Drain water. dispersed and dissolved hydrocarbons from the water prior to discharge to sea. domestic waste water treatment.0 tcf More than 3. - . Characteristic Small-scale FLNG Large-scale FLNG Liquefaction capacity Less than 3. LNG or LPG spills. Remove suspended solids. The streams processed are PFW. sea spray run-off and rainwater.000 m3 Liquefaction processes Simpler processes (for example SMR) Base-load-type processes (for example DMR) Table 2 – Ancillary systems.000 tons More than 70. and sewage treatment.000 to 50.000 tons Storage capacity Up to 220. Safely dispose of pressurised hydrocarbon gas and liquids during emergency situations. control room. Comment The water is taken from the sea using risers and it is treated with an electro-chlorination system to prevent marine growth and with oxygen scavengers to inhibit corrosion.TABLES Table 1 – Small and large scale FLNG.0 mtpa Required reserves 0. maintenance. drain water. Additional utilities - Accommodation. process water and utilities water.5 to 6.0 tcf Hull Ship-like Barge-like Weight 20. The drain water includes washdown water. Separation of flare stacks for water-wet streams and for cryogenic streams is required to avoid mixing. potential freezing and blockages. Amine and MEG spills.000 m3 More than 250.5 to 3. using thrusters. Utilisation of thrusters to support the mooring systems in extreme environmental conditions.  Internal turret. • Design issues both on jetty. • In area subjected to hurricane or typhoons disconnection may be desirable. taking mooring loads into the vessel. • Riser connections located in a riser balcony above the shipside.  Turret + thrusters. • Chain stoppers on main deck level. sensors and position reference system. given the possibility of failure. • Used in area with harsh environmental conditions. • Good in very deep-water applications.Table 3 – Types of mooring system Types Characteristics • 3-4 mooring lines at each corner. Adopted in case of conversion of existing Turret vessel in order to obtain a less invasive modification. • Three types:  External turret. • The position is maintained automatically. berthing lines and fenders attaching Jetty the floating units. • Need relative motion between FLNG unit and jetty in order to ensure the highest level of safety. • Strict requirements placed on redundancy and availability of critical subsystems. Dynamic positioning • Computer-controlled system. Safety solution which leaves less space to the containment cargo inside the hull. Spread • Directionality to the weather. • Mooring the FLNG unit to a jetty. 33 . and no prevailing weather directions. • Applied in benign location. Table 4 – FLNG phases risk allocation UPSTREAM Techno-Operational Market and Economic MIDSTREAM DOWNSTREAM  x O  x x EXTERNAL ORIGIN INTERNAL ORIGIN Table 5 – SWOT Analysis • • • • • • • HELPFUL FACTORS HARMFUL FACTORS STRENGTHS WEAKNESSES Unlocking stranded and small gas resources Pipelines avoided Possible reallocation of the facility Simplification of the LNG value chain Midstream risks avoided Lower environmental footprint Less impact on local communities • • • • • OPPORTUNITIES • • • Demanding technical challenges Production allowed in particular gas reservoir Usage of harmful fluids Less jobs creation Scattering of Oil Companies’ capitals in different countries THREATS • Expansion of global gas market LNG market share rising Solution for disputes between nations • • 34 Current execution influencing future reliability Investments and market growth threatened by the EU debt crisis Reduction of demand and prices caused by the debt crisis . Source: IEA. Source: BP. 2008. 2009. 35 .FIGURES Figure 1 – World Energy Demand (1980 – 2035). Figure 2 – Major trade movements (billion cubic metres). 36 . Source: Technip. Source: Saipem. LNG FLNG Figure 4 – LNG & FLNG Value Chain.Figure 3 – Undeveloped offshore gas fields in Australasia in 2007. 2009. Figure 5 .FLNG facility. Figure 6 . Aronsson. 37 . Source: Shell. Source: E. 2009. 2012.Upstream infrastructure. 38 .Figure 7 – Gas-treatment. Source: General Electric. Figure 8 – PGT25+G4 aeroderivative gas turbine. Source: Shell. 2009. Cargo tank types Membrane tanks Independent tanks Tank Type A Tank Type B Tank Type C Prismatic type Spherical type Figure 10 – Containment tank types. 2011. Source: DNV. 39 . Source: DNV.Fatigue screening around turret area of a floating unit. 2011.Figure 9 . Source: M.. 2011.Figure 11 – Most suitable containment system for FLNG. Bunnag et al. 2009. Figure 12 – Side-by-side transfer history. 40 . Source: Shell. 41 . Source: Bluewater. Source: Saipem. Figure 14 – Spread mooring system. 2012.Figure 13 – Tandem transfer system. Figure 16 – External turret mooring system. 42 .Figure 15 – Internal turret mooring system. Source: Bluewater. Source: Linde. Source: Chevron. 2009. Figure 18 – Concept Risk Assessment methodology. 43 .Figure 17 – Logical scheme of risk allocation. Figure 19 – LOPA Framework for FLNG process topsides. 2011. 2009. Figure 20 – Topside view of a FLNG plant. Source: Shell. Source: American Bureau of Shipping. 44 . 2013. Source: International Offshore & Gulf Of Mexico Report. 2008. Source: HIS. 45 .Figure 21 – Global Capex on FLNG Facilities by region. Figure 22 – Gas reserves distribution and exploitation. 2013-2019. Figure 23 – GHG emissions by source from the Prelude FLNG project. Source: Shell. 2009. Source: Shell. 2009. Figure 24 – Predicted noise levels during non-offtake (on the left) and offtake activities (on the right). 46 . ethane. The Warm Mixed Refrigerant (WMR). which meets the needs of the FLNG owner. is first compressed. propane and butanes. and let down in pressure through a Joule-Thompson (J-T) valve to provide refrigeration to precool the feed and CMR. Figure 1 – Single pressure DMR Precooler with and without Liquid Pump-around. The compression is performed in two stages. sub-cooled in the precooling CWHE. but with the increased cost of a 2bundle CWHE. a mixture of methane. DMR Single Pressure Precooling Figure 1 (on the left) shows a DMR precooling configuration with a single coil wound heat exchanger (CWHE) and therefore a single shell side refrigerant pressure. (AP) A1 . and the WMR contains no significant propane.APPENDIX Appendix A – DMR options for FLNG liquefaction process Air Products has developed several different precooling configurations to provide an optimized solution. This design may be desired since it eliminates a piece of rotating machinery (the pump) and may slightly improve the efficiency of the overall process. Instead. This process offers good efficiency. Figure 1 (on the right) shows another single pressure configuration. this one with no liquid pumparound. with partial condensation in the intercooler and pumping of the liquid around the second stage. then fully condensed by ambient cooling. the inter-stage liquid is sent directly through the precooling CWHE in a separate tube circuit. and joined by the intermediate pressure WMR before the second stage of the compressor. This process may provide better efficiency than the single-pressure process. but it has a significant efficiency penalty if propane is eliminated from the WMR composition. Figure 2 – Two Pressure DMR precooler. a two-pressure DMR precooler design is shown. (AP) A2 .DMR Two-Pressure Precooling In figure 2. The low pressure WMR is compressed in the first stage of the compressor. while the balance is cooled further in a second precooling CWHE and then used to provide the final precooling refrigeration at a low pressure. Some of the WMR is used to provide refrigeration at an intermediate pressure. The WMR is fully condensed and sent through a first precooling exchanger. one year after Shell commenced the drilling operation in the Northern Browse Basin. Around 260. helicopter landing Turret around which facility weathervanes and is moored to the sea floor Storage tanks in the hull for LNG. Heritage and the Arts. It contains no reefs or land above sea level.000 tons of that weight will consist of steel.000 tons. LPG and condensate The gas receiving. control rooms. Processing modules Living quarters. Shell reports that the FLNG facility itself will be 488 m long and 74 m wide. An artistic representation is shown in the figure below. Prelude’s field was discovered in 2007. and when fully loaded will weigh around 600. approximately 475 km north-northeast of Broome and 825 km west of Darwin. processing and offloading equipment will all be mounted on the facility's topside. maintenance areas and living quarters. The storage and power generation is to be contained within the hull. Water. at about 250 m of water depth. workshops. and the facility also supports other associated components such as the control room. which is about 40 km from the proposed location of the FLNG facility.Appendix B – Overview on Prelude project “Prelude” is the name of the first Floating LNG facility that is being developed by Shell. stores. The following information concerning the project are extracted from the guidelines provided by Shell itself to the Australian government through DEWHA (Department of the Environment. Once constructed the facility will be dragged to location where it will be permanently B1 . the nearest land is Browse Island. The project area is located in offshore waters. The main aspects from those mentioned are summarized in the following table. As a matter of fact.3 mtpa of condensate for export. and the FLNG facility has been designed to withstand severe weather thanks to its double-hulled structure. Prelude specifications Length 488 m Width 74 m Weight (unloaded) More than 260.6 mtpa B2 . The Prelude FLNG facility is expected to stay moored at location for 25 years.anchored by 4 groups of massive mooring chains in 250 m-deep water. and it is designed to withstand a 1 in 10.4 mtpa of Liquefied Petroleum Gas (LPG) and 1. Each anchorage chain holds to the sea floor by suction piles the size of small houses. as well as 0.000 t Weight (full capacity) Around 600.000 year weather event. will not be disconnected during bad weather. The sea plant is expected to produce 3. the safety of the FLNG facility has been largely taken into account during its design and it is comparable with modern offshore oil and gas facilities.000 t Life time Indefinite (25 years at Browse Basin) Process capacity 3.6 mtpa of LNG.