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ANNUAL MEETING MASTER OF PETROLEUM ENGINEERING
3/May/2016 Instituto Superior Técnico 1
Agenda
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• Natural Gas and LNG
• Changes in the LNG Supply Chain
• FLNG – State of the Art / Risks
• Findings about the CSF for FLNGs so far
• The next step
Is there a future for Natural Gas?
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• 8.7 Billion people by 2035
• China and India will grow 5.5 % (average) until 2035
• World’s GDP/capita estimated to increase 75%
• Demand for Natural Gas will grow 1.9 % / year
• Transportation using natural gas will grow 3% / year
Source: BP Energy Outlook 2035 Report, February 2015
Liquified Natural Gas
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Demand is real… What about the supply?
Source: BP Energy Outlook 2035 Report, February 2015
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Evolution of LNG Global Trade
Source: U.S. Securities and Exchange Commission - HÖEGH LNG PARTNERS LP, July 3, 2014
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Liquified Natural Gas – what is it?
• Between 87% mol to 99% mol of methane (CH4)
• The liquefaction process involves removal of certain components
• Condensed into a liquid at close to atmospheric pressure by cooling it to approximately −162 °C
• Takes up about 1/600th the volume of natural gas in the gaseous state
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Why LNG?
• LNG industry has supplied markets without gas from
places with gas without a market
• Safe
• Possibility of storage
• Environmental friendly
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LNG Industry – essential ingredients
• Sufficient gas reserves
• Long term commitments
• Access to Capital
• Strong relationships amongst all stakeholders
• External advisers
• Government regulations
Ironically, this happens with the simplest hidrocarbon molecule!
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The problem is…
• Many potential reservoirs, but…
-> too small / too far
->onshore `no-go zones’
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Furthermore…
• Other entrants in the market, i.e.
• Other substitutes, i.e.
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Changes in the traditional LNG Supply Chain
Source: FLNG—DETERMINING THE TECHNICAL AND COMMERCIAL BOUNDARIES, KBR
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Floating,
Production,
Liquefaction,
Storage,
Offloading…
… the possibility to
monetize
undeveloped or
stranded gas fields
FLNG – What is it?
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Source: KPMG Global Energy Institute, ‘LNG report series 2014’
Why is this topic relevant?
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FLNG Technology potencially reduces…
No need for long pipelines to shore;
compression platforms to push the gas to shore;
nearshore works such as dredging and jetty construction;
onshore development such as building roads, laydown areas and accommodation facilities.
• Cost
• Environment footprint
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FLNG Prelude - The largest facility ever built
Length - 488 meters
Breath - 74 meters
220 000 m3 of LNG
90 000 m3 of LPG
126 000 m3 of
Condensate
Source:www.perthnow.com.au
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The Prelude FLNG project
Source: Prelude Floating LNG Project, Draft Environmental Impact Statement
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Gas Treatment and Liquefaction
Source: Mokhatab (2014)
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Technical risks
• Safety Aspect on Space Constraints
• Technology Risk/Uncertainty
• Ship Motions
• Offshore LNG Offloading
• Hull
• Fluid Management
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Commercial Risks
• Contractor and Fabrication Competence
• Project Execution
• Availability
• Oil and Gas Prices
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Is the design extrapolation from…
• An FPSO
• Onshore LNG project
…a slight deviation
or
… a completely new application?
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The Critical Success Factors for FLNGs so far…
Critical Success Factors
PM and PMT
Interface Management
Stakeholders
Scope of Work
Regulatory Framework
Cost Managementand Finance
FEED Planning
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The next step…
• Interview with experts across the value chain
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The question remains….
…what are the critical success factors in a FLNG project?
Source: www.rigzone.com
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References
BP. (2015). Energy Outlook 2015. BP.
Bukowski, J. et al. (2013) NATURAL GAS LIQUEFACTION TECHNOLOGY FOR FLOATING LNG
FACILITIES, Air Products and Chemicals, Inc
Caswell,C. et al. (2010), FLNG—DETERMINING THE TECHNICAL AND COMMERCIAL
BOUNDARIES, KBR
Christodoulou, I. (2015), Challenges and opportunities that define the success of an FPSO project,
University of Nordland
IGU. (2015). World LNG Report - 2015 Edition. International Gas Union.
Inkpenn, A., & Moffet, M. (2011). Global Oil / Gas Industry - Management, Strategy & Finance. Tulsa,
Oklahoma: PennWell Corporation.
International Energy Agency. (2015). Energy and Climate Change - World Energy Outlook Special
Report. Paris: IEA.
.
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KPMG International. (2014). Floating LNG:Revolution and evolution for theglobal industry? KPMG.
LNG World News. (4 de March de 2016). South Korea: Petronas holds naming ceremony for its first FLNG
unit. LNG World News .
Mokhatab, S. (2014). The handbook of Liquified Natural Gas. ELSEVIER.
Mollard, F., Robert, C. FLOATING LNG: THE CHALLENGES OF PRODUCTION SYSTEMS AND WELL
FLUID MANAGEMENT, Process & Technologies Division, Upstream Offshore Process Engineering,
Technip, Paris, France
Stegenga, S., Pek, B.. (2011). Floating LNG – Groundbreaking Innovation Becoming a Reality.
International Petroleum Technology Conference. Bangkok, Thailand, 7–9 February 2012.: IPTC.
Tusiani, M., Shearer, G., (2007). LNG A NONTECHNICAL GUIDE, PennWell Corporation, Tulsa, Oklaoma
Wang, X., Economides, M., (2009). Advanced Natural Gas Engineering. Gulf Publishing Company,
Houston, Texas.