Feature: The maturing of the offshore LNG industry

The May 2011 final investment decision (FID) by Shell to proceed with its Prelude project in deep water 200km from the northwestern coast of Australia represents a key milestone in the development of the offshore LNG industry. The subsequent contract for the LNG

floating production storage and offloading (LNG FPSO) unit required to bring this project to fruition was the first ever order for such a vessel, and its construction will set new benchmarks in naval architecture, hydrocarbon processing and offshore technology.
At 488 metres from bow to stern, 74m wide and displacing 600,000 tonnes when fully ballasted, the Prelude LNG FPSO will be six times the size of the largest aircraft carrier and the largest floating structure in the world by a considerable margin. Approximately 260,000 tonnes of that displacement weight will be the steel required for the hull and topsides units.
The turret mooring system alone for the Prelude unit will exceed 30m in diameter and 100m in height. The mooring system will allow the FPSO to weathervane at its permanently anchored position, and is being designed to withstand extreme mooring forces resulting from the cyclonic metocean environment.
In addition to the 3.6 million tonnes per annum (mta) of LNG that the Prelude FPSO will be able to produce, the unit will have the capacity to turn out 1.3 mta of condensate and 0.4 mta of LPG. The vessel will have storage space for 220,000m3 of LNG, in membrane tanks, 90,000m3 of LPG and 126,000m3 of condensate. Shuttle gas and condensate carriers loading cargoes at the FPSO will do so in a side-by-side mooring configuration.
The FPSO’s single topsides liquefaction train will use Shell’s own double mixed refrigerant (DMR) technology. Cold water, drawn from depths of 150m, will be used to enhance the efficiency of the liquefaction process which will be able to accommodate gas with a carbon dioxide (CO2) content of up to 13 per cent. The cold cooling water also enables the use of steam turbines as the prime mover for power generation and compressors and to provide reboiler heat. While steam is not the most efficient power source, it is reliable and its use enables the simplest power train arrangements.
Shell has been investigating offshore LNG production for some 15 years, having unveiled a conceptual design for an FLNG vessel for possible use off the coast of Namibia back in 1999. That project may have been stillborn, but Shell engineers have continued to develop the group’s LNG FPSO option. The ongoing design and engineering study programme for offshore LNG production units carried out over the past decade has now borne fruit.
Shell has targeted a 2017 startup for its first LNG FPSO vessel, a target which would ensure the exploitation of Prelude gas a little over 10 years after it was discovered. Prelude is set to signal a breakthrough, and many further LNG FPSO projects are likely to be sanctioned in the months and years ahead. For some of the smaller-scale projects their FPSOs could well be in service before Prelude.
Proposed LNG FPSO projects for Papua New Guinea, Indonesia, Brazil and elsewhere in Australia are moving rapidly to the FID stage. Shell itself is seeking to build a string of FPSOs to its generic Prelude design for a range of offshore projects it is in the process of developing.
The research and development programmes of all those developing LNG FPSO projects have had to assess a wide range of general and LNG-specific offshore vessel challenges. The latter include topsides layouts on a relatively small plot size; fractionation and liquefaction processes; the integrity of partially filled membrane tanks; the handling and storage of cryogenic products; FPSO mooring arrangements and the mooring and loading of LNG and LPG carriers adjacent to a production plant.
The offshore LNG sector would not have reached its current position - the cusp of the floating LNG production era - without the support of the full range of industry participants. Project promoters could not have left their starting blocks without the key input provided by shipbuilders, class societies, naval architects, containment system designers, model testing installations and a spate of equipment suppliers.
The floating LNG production sector has also benefited from experience gained by LNG regasification vessels (LNGRVs) and floating regasification and storage units (FSRUs). There are now 10 LNGRVs and three FSRUs in service while two existing LNG carriers are currently being converted into FSRUs.
Two LNG import terminals utilise offshore submerged turret loading buoys to enable LNGRVs to regasify cargoes at sea and pump gas directly into shore grids via subsea pipeline connections. Other than these two facilities the existing LNGRVs and FSRUs regasify their cargoes at dedicated jetties in protected waters. A notable development will occur in 2012 when the first FSRU to be stationed in deep water - one of the LNG carriers now undergoing conversion - goes into service off the Italian coast near Livorno.
Furthermore, the FSRU bandwagon is not slowing down. In the first six months of 2011 a total of 29 new LNG carriers have been ordered, and many of the contracts have options for additional newbuildings attached. Two of the new orders have been specified as FSRUs, but many owners have agreed with their shipbuilders that their new LNG carriers plus options could be constructed as FSRUs if specified by a certain date. A growing number of gas import nations regard FSRUs as the ideal solution to their immediate needs.
LNG FPSOs, LNGRVs and FSRUs enable the delivery of LNG to customers at lower cost and more quickly than would be the case if a shore terminal and all the associated infrastructure had to be constructed and permitting processes complied with. LNG FPSOs also make possible the development of stranded offshore gas fields that otherwise would be too costly or too difficult to realise.
Given the challenges that needed to be overcome, it is no surprise that offshore LNG is several decades behind offshore oil. However, thanks to the burgeoning demand for gas worldwide and the remarkable technological advances that have been made, offshore LNG is poised to make a dramatic impact.
Source: Bimco