Quantcast
Channel: DNV GL Blog - Energy of the Future » FLNG
Viewing all articles
Browse latest Browse all 9

The F-word

0
0

Ok, sorry about that title, it will probably disappoint you that I am only going to talk about FLNG. According to Google, the online use of the word “FLNG” is on a steady rise. The recent spike is of course attributed to the fact that Prelude actually floats.

Here’s the short status: 3 FLNG units are under construction: Exmar’s Pacific Rubiales in Colombia, Petronas’ Sarawak in Malaysia, and Shell’s Prelude in Australia. Another 10 projects are proposed, and are currently at various stages of concept and FEED development. On top of that comes a list of at least 16 projects that have been mentioned publicly at some point.

Based on these projects, I pull out my analyst’s ruler and easily make some projections towards 2020. My optimistic self (who is not known to come out very often) develops the red line in the below graph, it assumes that all three projects under construction plus all 10 proposed are constructed and delivered on schedule. My super-optimistic self (who has never been seen) develops the blue line, which includes every idea of a project being delivered on indicated timing. For the blue line I have only excluded those projects where no capacity or start-up date has been indicated. My conservative self stays quiet this time, cause I don’t want to be the one to crash the party.

The rise of FLNG

The rise of FLNG

It’s easy to point out a thousand reasons why some of these projects will never see the light of day, and the rest will probably be delayed judging by the project execution performance for the LNG industry over the past decade. However, this does not conceal the fact that there will be something close to a revolution in this industry over the coming years – the FLNG will replace land based liquefaction plants as the concept of choice.

One main driver for this revolution is of course cost. CAPEX estimates now indicate that FLNG may offer up to 50% discount to land based plants. When hearing that, it is important to notice that it is difficult to compare apples with apples for these projects, there are large variations in complexities and in budgeting practices. Still, there seems to be broad agreement that FLNG will be significantly cheaper. Assuming again some very optimistic estimates of 1000 USD/tpa, we can calculate a total investment need of 83.5 billion dollars before 2020, and that is just for FLNG units itself, in addition comes wells, subsea equipment, LNG carriers, etc.

Here at DNV GL, we launched our first rules for FLNG units in 1978, and now we are celebrating that finally there seems to be a market for them!


Viewing all articles
Browse latest Browse all 9

Latest Images

Trending Articles





Latest Images