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Three Underutilised Trends in Today’s FLNG Market

Contributor: Kristian Utkilen
Posted: 05/09/2010
Three Underutilised Trends in Today’s FLNG Market
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Kristian Utkilen, Managing Director, Kanfa Aragon, speaks exclusively to Oil and Gas IQ’s Bryan Camoens on the challenges, cost factors, benefits, disadvantages and the latest trends in the FLNG sector.

What are some of the design and engineering limitations and challenges of liquefactions plants for offshore environments?

What I think is a design and engineering limitation for liquefaction plants is the standard ship sizes. If you want to stay within the normal sizes you have a limited area for the process plant. If you do not want to stay within normal ship sizes you can of course build bigger barges. These large barges require modifications of shipyards as typical ship yards today not have dry docks, etc. available for these sizes. An alternative is to select the Sevan Marine solution with their circular shaped FPSOs having a much larger available deck space than normal ships. Other limitations depend on the technology you select. If you go for expander plants the limitations are the available drivers to the compressors. In other words, what is the largest gas turbine available for floating installations? The largest at the moment will give you approximately 50 watts per LNG train. Another typical challenge is to combine cryogenic technology and FPSO experience. The selected contractor needs both these experiences to ensure success of the project.

Could you please explain the challenges faced in the design and performance of the field specific and pre-treatment systems?

The quality of LNG is clearly specified and the specifications for LNG are defined whether it is for sale in the United States or Asia. The feed gas varies from field to field; therefore the feed needs to be treated according to the specifications to your LNG-product. Different types of process system are required depending on what kind of field you are at.

Typically engineering challenges you may face are stabilization issues of the condensate or recycle of middle components like propane and butane through the process system. Another issue is tall columns for CO2 removal. The last three years we have studied and found solutions and design requirements for such equipment for floaters.

Another challenge is the large feed gas flow compared to standard FPSOs, resulting in very tall flares.

What are some of the key operational and investment cost factors to consider for FLNG projects?

As I see it, it is commercially the best to produce as much LNG as possible per vessel. To keep your CAPEX at the lowest, you also want to produce as much as possible per LNG train. It is the available equipment on the market that is controlling the production rate of your plant.

Operational wise, you would want to operate your train(s) on full production at all times. You do not invest in a 2x 100 percent LNG train as you always want to utilize your available capacity. Sub-systems may have redundancy to increase your availability.

Could you please elaborate on the benefits and disadvantages of plant Efficiency versus availability and Capex considerations?

A combination of high availability and utilizing your production capacity gives your income. The focus should be more on availability than efficiency. If you are selecting the technology with the highest liquefaction process efficiency you will install a very complex plant, and thereby reducing the availability. We believe that it is better to go for a more simple plant with a minor reduction in the efficiency. Instead of using 6 to 8 percent of the feed gas as your fuel you better select a technology which takes 8 to 10 percent of your feed. This will reduce the CAPEX and increase the availability of the plant.

What are some of the latest trends in FLNG that are currently underutilized?

There are typically three trends in FLNG-market. Some oil majors are studying large barge solution and are bringing onshore technologies and solutions offshore. The second trend is ship-owners generally selecting expander technologies for installation on standard new hull sized ships. The third trend is installing LNG process plants on existing ships, meaning conversion of LNG carriers or other ship types. All estimates I have seen shows a remarkable lower cost per kilo LNG produced at standard ship sized solutions.

What are some of the current untapped opportunities in the FLNG sector and where do you see the future of FLNG in the next five to 10 years?

I think an untapped opportunity is the combination of condensate and LNG-production. If your feed gives large quantities of both products, your economics will look much brighter. For the future of the FLNG-market I hope a few of the smaller FLNG projects will soon go ahead as this will open up the LNG market further. I think many project will be initiated if some of these "low" cost projects are initiated.

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Kristian Utkilen
Contributor: Kristian Utkilen