2021 Is the floating LNG moment?
- 1. Is the Floating LNG moment? OCTOBER, 2021
- 2. 2 Index 1. LNG Trade. 1.1 LNG Imports. 1.2 LNG and Gas Pricing. 1.3 Floating Liquefaction Capacity Worldwide. 2. Floating Liquefied Natural Gas (FLNG). 2.1 In Operation Global FLNG. 3. Business Opportunity. 4. FLNG Project. 4.1 Justification. 4.2 Scope of project. 4.3 Study cases. 4.4 FLNG CAPEX (referential) 4.5 Risk of Project. 4.6 Advantages.
- 3. 3 Figure: 2020 LNG Imports and Market Share by Market. Source: GIIGNL. Despite COVID-19 impacts on demand and supply, global LNG trade continued its upward trend in 2020 for another consecutive year of growth, reaching 356.1 MT. China, India, Chinese Taipei, the United States (Puerto Rico), and Brazil increased net imports through expansion of import capacity. 1. LNG Trade 1.1 LNG Imports
- 4. 4 Lowest point for Brent US$ 69.96/bbl on 6 Jan 2020 Lowest point JKM US$ 1.83/MMBtu on 28 Apr 2020 Lowest point for HH US$ 1.47/MMBtu on 26 Jun 2020 Highest point for HH US$ 3.29/MMBtu on 30 Oct 2020 35 30 25 20 15 10 5 0 Dec 2019 Jan 2020 Feb 2020 Mar 2020 Apr 2020 May 2020 Jun 2020 Jul 2020 Aug 2020 Sep 2020 Oct 2020 Nov 2020 Dec 2020 Jan 2021 Feb 2021 Mar 2021 90 80 70 60 50 40 30 20 10 0 Dated Brent (US$/bbl) JKM LNG (US$/MMBtu) WIM LNG (US$/MMBtu) NEW LNG (US$/MMBtu) GCM LNG (US$/MMBtu) Dutch TTF (US$/MMBtu) Henry Hub (US$/MMBtu) Lowest point for Brent US$ 13.24/bbl on 21 Apr 2020 Lowest point for TTF US$ 1.13/MMBtu on 28 May 2020 Highest point for TTF US$ 6.90/MMBtu on 31 Dec 2020 Feb JKM Price at record US$ 32.50/MMBtu on 13 Jan 2021 Source: IGU World LNG report - 2021 Edition. 1. LNG Trade 1.2 LNG and Gas Pricing
- 5. 5 1. LNG Trade 1.3 Floating Liquefaction Capacity Worldwide Australia, 3.6 MTPA Mozambique, 3.4 MTPA Malaysia, 2.7 MTPA Mauritania, 2.5 MTPA Cameroon, 2.4 MTPA Figure: Global sanctioned and operational FLNG liquefaction capacity as a february 2021. Source: Rystad Energy Figure: Global proposed FLNG liquefaction capacity. Source: Rystad Energy. United States, 54 MTPA Canada, 32 MTPA Djibouti, 10 MTPA Mauritania, 7.5 MTPA Australia, 6 MTPA Israel, 3 MTPA Cameroon, 1.4 MTPA Russia, 1.3 MTPA Congo, 1.2 MTPA
- 6. 6 2. Floating Liquefied Natural Gas (FLNG) A floating LNG (FLNG) is an LNG plant constructed on a ship or a barge which has LNG storage and offloading facilities. The FLNG accomplishes the gas treatment and liquefaction (production of LNG) from the natural gases produced in gas fields, and the storage/offloading of product LNG to LNG carriers for ocean transportation. In operation liquefaction technology: Black & Veatch PRICO (Cameroon FLNG, Tango FLNG) Shell DMR (Prelude LNG)
- 7. 7 Source: Rystad Energy. Tango FLNG Cameroon FLNG Petronas Prelude FLNG 2. Floating Liquefied Natural Gas (FLNG) 2.1 In Operation Global Floating LNG 7.2 MTPA Operational Floating Liquefaction Capacity Worldwide as of Jan 2021 The Tango FLNG vessel is currently available for other projects. 0.5 MTPA 16,500 m3 Start up: 2019 2.4 MTPA 125,000 m3 Start up: 2018 3.6 MTPA 437,500 m3 Start up: 2019 Liquefaction Technology: Black & Veatch PRICO Liquefaction Technology: Shell DMR Liquefaction Technology: Black & Veatch PRICO
- 8. As global liquefied natural gas trade continues to expand rapidly, the challenge of liquefaction process selection becomes increasingly important. Selecting more versatile and cost-effective liquefaction technologies that meet stringent emissions standards will be a key focus for new projects as governments and companies commit to decarbonisation efforts. Cost estimates for most new projects suggest that they will be able to profitably deliver to stronger import markets, such as China and Southeast Asia, which are expected to see larger increases in LNG imports during this period. 8 3. Business Opportunity
- 9. 4. FLNG Project 4.1 Justification 9 The development of a FLNG project is supported by: Current decarbonization trend. The difficulties that a natural gas liquefaction plant on land may present.
- 10. 4. FLNG Project 4.2 Scope of Project 10 To install a Floating Liquefaction Natural Gas in order to provide the facilities required to: Facilities for the liquefaction of natural gas. LNG storage and utilities required.
- 11. 4. FLNG Project 4.3 Proposed Cases (estimated) 11 Component Maximun concentration CO2 50 ppmv H2O 0.1 ppmv Mercury 0.01 µg/Sm3 H2S 4 ppmv Mercaptan Sulfur 8 ppmw Nitrogen 1.0 mol% Pentanes & heavier 0.075 mol% Limits for feed gas impurities to liquefaction process (referential) Case 1: 90 MMPCED of feed gas in order to reach 0.5 MTPA of liquefaction capacity (small scale). Case 2: 380 MMPCED of feed gas in order to reach 2.4 MTPA of liquefaction capacity (medium scale). Case 3: 550 MMPCED of feed gas in order to reach 3.5 MTPA of liquefaction capacity (large scale).
- 12. 4. FLNG Project 4.4 FLNG CAPEX $/tpa (referential, 2019) 12 Figure: FLNG Cost. Source: Brian Songhurst, Research Associate, OIES. “Floating LNG Update, 2019.” 0 500 1000 1500 2000 2500 Prelude Satu (Petronas PFLNG 1) Dua (Petronas PFLNG 2) Tortue (Golar Gimi) Cameroon Episeyo (Golar Hilli) Tango (was Caribbean FLNG) $/tpa
- 13. 13 4. FLNG Project 4.5 Risk of Project Risk Factors Impact on LNG Project Development Projects Economics Long-term sales contracts that allow for a sufficient return typically underpin the financing of LNG projects. High project costs or changing market prices can have a large impact. Politics & Geopolitics Permitting may be time consuming. Regulatory Approvals Regulatory approval may be costly and extends to the approval of upstream development and pipeline construction. Partner Priorities Not all partners are equally committed to a project and face different constraints depending on their respective portfolios. Ensuring alignment in advance of an FID may be difficult. Ability to Execute Partners must have the technical, operational, financial, and logistical capabilities to fully execute a project. Certain complex projects may present additional technical hurdles that could impact project feasibility. Business Cycle Larger economic trends. Feedstock Availability The overall availability of gas to supply an LNG project may be limited by technical characteristics of the associated fields. Marketing/Contracting Project developers generally need to secure long-term LNG buyers for a large portion of project capacity before sanctioning a project. Source: IGU World LNG report - 2019 Edition.
- 14. 14 4. FLNG Project 4.6 Advantages Fast track solution that can fill sudden need of gas. Competitive costs for temporary, shorter-term operation. Overcome onshore site limitations. To reduce the infrastructure and environmental impact on onshore since FLNG does not require the coastal development. To be built in fabrication yards where facilities and practices are well- established for construction of the topsides modules and hull without constraints of the countries or regions of the gas field or onshore LNG plant, which secures the efficiency and the safety of construction.