A ground-breaking floating LNG (FLNG) innovation to produce, liquefy, store and transfer LNG at sea will unlock stranded gas resources. FLNG avoids the need to build pipelines to the coast, onshore liquefaction plants, and storage and offloading facilities, opening up opportunities to develop offshore gas resources once considered too remote, too small or too difficult to tap – resources that otherwise wouldn’t be developed.
Global gas consumption will rise by 50% by 2030 – a faster growth rate than oil – and global LNG demand is likely to double during this decade, primarily driven by Europe, China and a host of other Asian and Middle Eastern countries that will soon begin importing LNG.
Growing population levels and surging economic growth are driving rising energy consumption. Natural gas will play an important role in meeting that demand with a lower cost to the environment than other hydrocarbons use – gas is abundant, affordable and environmentally acceptable. And LNG will play its own key role, offering great flexibility to both suppliers and customers – it can come from a wide variety of sources and be shipped to multiple destinations.
Complementary
FLNG is complementary to onshore LNG production, with opportunities worldwide, and the technology also provides an alternative for gas developments in environmentally sensitive areas.
Shell has been working on FLNG technology since the mid-1990s. And while the concept is deceptively simple – bring the LNG facilities directly over the offshore gasfield rather than processing and piping the gas long distances to an onshore liquefaction plant with adjoining storage and offloading facilities – development of the technology has taken many twists and turns. Some paths were dead ends, but throughout the process, lessons have been learned and the core concept has been improved.
There are three main obstacles to operating an FLNG facility compared with a traditional onshore liquefaction plant. Working at sea in itself provides challenges, such as marine issues and working in remote locations. Operating on a plot size about one-quarter the size of a conventional onshore LNG plant is no mean feat either. Then there is the challenge of operating on top of product storage tanks.
To meet and overcome these hurdles, safety and reliability were at the very core of the design, testing and external-approval programme. To minimise risks, Shell uses tested, proved technologies – albeit in novel combinations. All the main components and processes in the FLNG concept have been subject to rigorous testing and qualification to ensure safe design and operations.
The tests included full-scale sloshing trials on cryogenic storage tanks; some extraordinary freezing/heating experiments on thermal deck coating (starting at around -200°C then applying heat well above 1,000°C); full-scale loading-arm development and testing; and extensive work with LNG-carrier captains to optimise berthing and loading procedures in various weather conditions and sea states. Each test provided new insights, resulting in adjustments and adaptation of the design; and several patent applications have been filed, such as the pipe layout of the facility and water-intake risers.
Measuring 480 metres by 74 metres, Shell’s design will be the largest floating facility in the world. The weight of the equipment combined with the facility’s hull and the stored liquids will total around 0.6m tonnes, around seven times as much as the largest aircraft carrier. Even the scale of FLNG models used for lab and field-scale trials have broken records: the FLNG facility model used for testing behaviour under normal and extreme marine conditions is more than 8 metres long and weighs around 4.5 tonnes, making it the largest floating model used in the Netherlands’ Marin test facilities.
Safety has been a key consideration in the design right from the start, ensuring safe operations and asset integrity. This resulted in the facility’s safety being on par with other modern offshore facilities. Some important factors are the facility’s layout, equipment count and the use of passive protection systems over active ones. For example, the design includes safety separation gaps between modules and the crew accommodation is at a significant distance from the hydrocarbon-processing areas. Also important, especially for the crew well being, Shell’s design for the FLNG facility is more stable than a floating production, storage and offloading vessel, because of its sheer size.
All of this work was conducted during a thorough design phase and with the assistance of external verification and regulatory bodies, such as Australia’s National Offshore Petroleum Safety Authority.
More than a design
As every LNG cargo offloaded represents tens of millions of dollars, the value of an FLNG facility for resource holders, customers and project partners lies in its ability to deliver, day in day out, week after week, year after year. Success will be measured by safety, robustness, reliability and availability. A successful FLNG project is much broader than the FLNG facility itself and must also address the upstream infrastructure, LNG carrier movements and operations, marketing of the gas, logistical and land-based support.
Equally important to technical credibility is the proved capability to successfully deliver megaprojects, a balance sheet capable to ensure financing and insurance, the capacity to underwrite long term off-take and bring gas to markets, strong partnerships and healthy project economics. All this uniquely equips Shell to make FLNG a world-first reality.
The critical factors in making FLNG a success are all based on building and growing confidence. Partners and stakeholders throughout the value chain must be confident that all their concerns have been addressed whether technical, economical, commercial or operational. Customers need confidence in reliable performance at a competitive cost. And insurers, investors, regulators and resource holders need confidence in the safety, reliability and environmental impact of the full value chain; and in the ability to deliver and operate such a complex and large project on time and on budget.
All the technical, economical, commercial, operational and political questions have been answered and Shell is confident it can successfully bring all these aspects together both for Prelude FLNG in the very near-term, and for future FLNG projects beyond this first Australian flagship project.
Shell FLNG
FLNG allows the unlocking of stranded gas resources as it produces, liquefies, stores and transfers LNG at sea. It can provide a means of developing more remote, smaller or difficult gas reserves, making it complementary to onshore LNG development.
Shell’s 100%-operated Prelude gasfield, around 200 km offshore northwest Australia, is the planned site for the company’s – and possibly the world’s – first FLNG project. The field was discovered in January 2007. A final investment decision for the project is expected this year.
Measuring 480 metres by 74 metres – the equivalent of seven Boeing 747s in length – Shell’s FLNG vessel will also be the largest floating facility in the world. The technology has also been selected as the Sunrise joint venture’s preferred option for developing the Greater Sunrise gasfields in the Timor Sea, following an extensive and rigorous concept-evaluation process. There are further opportunities to use the technology around the world.
Robust design
Shell offers a robust design that can be tailored to specific field characteristics within a wide production envelope with capabilities to receive the wellhead stream, treat the feed gas, and produce LNG, liquefied petroleum gas (LPG) as well as condensate. Liquids production depends on the specifics of each gas reserve and its composition. For Prelude, which has gas with condensate, it is able to produce LNG, condensate and LPG. For gasfields that hold fewer liquids, they might be able to produce more LNG, but might not produce LPG.
The facility is designed to withstand severe weather events. The ability to remain connected throughout all weather conditions, including category-five hurricanes, is a critical feature. It avoids the need to disconnect the facility and move it off the field, saving valuable production days and enhancing economic returns. Overall, the availability of Shell’s FLNG facility is on par with onshore plants.
Milestones in Shell’s FLNG journey
1996 – Shell starts an initial work programme emanating from a structured hazard-identification exercise.
2007 – Shell discovers gas with its Prelude well 200 km offshore northwest Australia, followed by a further gas find with its Concerto well, in 2009, around 15 km from Prelude.
2009 – Shell enters into a global master agreement with a consortium of Technip and Samsung Heavy Industries to design and build multiple FLNG facilities over a period of 15 years.
2009 – Shell decides to develop Prelude and Concerto using its FLNG technology. The project enters the front-end engineering design (Feed) phase of development.
2010 – Shell FLNG selected as development option by the Sunrise joint venture for the Greater Sunrise development in jointly run waters between Timor-Leste and Australia.
2011 – Feed phase for the Prelude FLNG due for completion. Shell targeting a final investment decision.
*Neil Gilmour is general manager, Floating LNG, Shell Upstream International