Notice: Trying to get property 'slug' of non-object in /nas/content/live/cdiver/wp-includes/taxonomy.php on line 4354

Floating Production Sector Stays Healthy, FLNG Generates More Interest

0
147

Orders for floating production systems have stayed firm this year, with the oil and gas industry committing over $16 billion in construction contracts for new units, Energy Maritime Associates Pte Ltd. (EMA), a market research and advisory company, said in a recent announcement. Meanwhile, interest in floating liquefied natural gas (FLNG) units is rising as they offer a more viable economic solution for developing gas projects.

These new floating production systems (FPS) will join 264 units already operating worldwide, including floating production, storage and offloading (FPSO) vessels which account for three-fifths of the total, EMA said in its mid-July report. The balance comprised production semisubmersibles, tension leg platforms, production spars, production barges and floating regasification/storage units (FRSU). There are also 99 non-production floating storage/offloading (FSO) units in service.

THE YEAR SO FAR

The offshore petroleum industry has ordered 13 FPS and 2 FSOs so far this year, including 3 large FPSO units planned for Angola, 3 newbuild production barges for Indonesia, 3 FRSU units and 2 FPSO for the UK North Sea and two FLNG units, the EMA said.

“The pace of orders has recovered sharply from last year and is 25 percent more than the 16-year average,” EMA observed.

Italy’s Eni S.p.A. was ordered one of the three large FPSOs in Angola, with Malaysia’s Bumi Armada Berhad bagging the $2.9 billion contract in March to supply the facility for work at Block 15/06, East Hub located offshore Angola in October 2016.

France’s Total S.A. awarded contracts for the other two Angola-bound FPSOs to Saipem in a $4 billion deal, inclusive of a $1 billion operation and maintenance services deal for the two vessels, in April. These two FPSOs are to be deployed to the Kaombo oil field in Block 32, offshore Angola in 2017.

On FLNG, EMA noted that two large liquefied natural gas (LNG) projects have met with setbacks recently.

One of these was the Bonaparte LNG project to develop the Petrel, Tern and Frigate natural gas fields, located 155 miles offshore west of Darwin, Australia. In June, Bonaparte LNG field operator GDF Suez S.A. and partners Santos Ltd. decided not to proceed with the front-end engineering and design [FEED] work for the project. Instead, the partners will consider other potential development options, including pipeline and FLNG.

“Future development [of the offshore gas fields] using floating LNG technology, although technically robust as demonstrated during extensive pre-FEED studies, does not currently meet the companies’ commercial requirements,” Santos said in a press release.

The decision by Australia-based Woodside Petroleum Ltd. to withdraw from the Leviathan gas project offshore Israel in May also dampened interest in FLNG, which had been mooted as a field development option. Woodside attributed its pullout from the Leviathan project to the failure of the project partners to reach a commercial acceptable outcome.

“The issue for these mega-FLNG projects seems to be an insufficient risk/reward balance in the eyes of the oil companies,” EMA commented.

The FLNG segment was not entirely gloomy as Golar LNG Ltd. placed the world’s first order with Singapore’s Keppel Shipyard Ltd. – a subsidiary of Keppel Offshore & Marine (Keppel O&M) – in July for the conversion of an existing 4.41 million cubic foot (125,000 cubic meter) capacity Moss LNG carrier, named the Hilli, into a floating liquefaction vessel (FLNGV). Conversion work for the FLNGV, worth approximately $735 million, is scheduled for delivery in the first quarter of 2017.

While Royal Dutch Shell plc’s newbuild Prelude FLNG facility, currently under construction at Samsung Heavy Industries’ Geoje Shipyard in South Korea, will have a capacity of 5.3 million tons per annum (Mtpa), EMA noted that Golar’s FLNG vessel, which was built at a cost of $1.2 billion and without any client on hand, is smaller at 2.2-2.5 mtpa.

“Golar is targeting a less complex type of FLNG project than Bonaparte and Leviathan and is in discussions for requirements in Africa and North America,” according to EMA.

MORE CONVERSIONS FOR FLNG?

Golar’s optimism regarding the smaller-scale FLNG segment is reflected in its contract with Keppel Shipyard, which contained options for the firm to convert another two LNG carriers into FLNG vessels. It hopes to capitalize on a “new paradigm in LNG production space – faster, more cost effective and smaller floating projects with much simpler financing model,” the firm commented in a presentation to the Marine Money Week in New York in June.

Source

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.