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7 things to consider when developing a FLNG project
FLNG projects share the same key considerations of any oil and gas project, however, the order of priority of those considerations are different due to the unique characteristics of FLNG. Based on KANFA Aragon’s experience of continuously working in FLNG projects across the last 10 years we have identified the following key areas to focus on for any FLNG project:
- Safety: Safety is always the number 1 priority, especially in a floating application. FLNG doesn’t have the luxury of a large amount of available space as onshore LNG typically does. As a result the design challenges to meet the required safety levels are much more considerable especially when considering the use of mixed refrigerant technologies that require large inventories of hazardous refrigerants and also the volumes of cryogenic and hazardous fluids in general. It is important to make the right decisions with regards to production levels and liquefaction technology to use early, as these will have a direct impact on the cost of meeting the safety requirements for producing LNG on a floating facility.
- Production Capacity: Although there is a strong argument to produce as much LNG as possible for project economics, this must be balanced with practicality. There is a limit to what is suitable in terms of production levels of LNG in a floating environment. From our experience, the limit is approximately 3mtpa per FLNG vessel. In addition, often the technical aspects of FLNG are not the restraining factor for a project to proceed, it is typically financing. There is a certain threshold production level where financing becomes difficult to achieve. So it is important to target the right production level per vessel - it is always possible to produce more by having multiple vessels.
- CAPEX: CAPEX as always is important to minimize. As a result, it pays to select the technology that gives the highest amount of LNG per unit of CAPEX. This is then linked to the complexity and number of trains that can fit into the available space. From this point of view N2 cycles will always be the strongest option as their simplicity, lack of need for safety gaps or high levels of reinforcement for blast loading as other technologies require means that it possible to get more LNG per m2 topsides space and more LNG per unit CAPEX as a result.
- Production Availability: Production availability is by far the biggest influence over NPV after overall production levels. In FLNG the limited space and desire to keep weight and CAPEX down results in minimal sparing of key systems. So it is critical to select a technology that is inherently stable, robust, simple to operate and can turndown easily. Furthermore, multiple trains of liquefaction present greater flexibility in production and result in an overall improved production availability. In addition to this, nitrogen cycles will give the best overall availability due to the simple and stable nature of using single phase nitrogen gas as a refrigerant.
- Suitability of Technology: As proven by offshore oil and gas, it is not prudent to apply onshore solutions directly offshore. However, this has often been the approach taken in FLNG projects to date. Technologies that are designed and optimized for onshore cannot be applied in a floating environment with only minor adjustments/verification and through simply “modularizing” them. It is highly important that any technology applied is tailored for its environment otherwise in the best case the production availability will be impacted and in the worst case the overall safety of the facility can be affected.
- Operability: LNG plants are complex, the level of complexity depends on the liquefaction technology applied. In a floating application CAPEX and OPEX need minimized complexity and ease of operation, so it makes sense to select a liquefaction technology that it simple to operate, requires minimal intervention and is a simple as possible. There is a clear difference between MR cycles and N2 cycles here. Although an SMR and an N2 cycle are equally complex in terms of number of rotating equipment items, an N2 cycle is faster to start up, simpler to operate as it is a single phase process and also will require less intervention as the main refrigerant is non-hazardous, non-corrosive and can be simply produced with standard N2 generators. Furthermore, N2 cycles are able to relatively easily turndown to very low levels with associated power saving.
- Efficiency: Normally efficiency, and specifically liquefaction cycle efficiency, is near the top of the list for onshore LNG. However, in FLNG it is a secondary concern behind optimizing safety, availability and operability. This is due to the limited effect that efficiency has on NPV compared to production availability. It is more prudent to select an arrangement that is robust, easy to operate and gives optimized production up time over another arrangement that may have a higher efficiency. Having said that, it is important to optimize the efficiency of the plant as far as possible without impacting the production availability.
Possibly the most important consideration for anyone looking to utilise FLNG is to select partners who know what the critical areas are and who know both LNG and offshore requirements. Without having both of these capabilities it isn’t possible to judge correctly what the key areas to focus on are.
Do you agree with this ranking? What are your top 7 things to consider when developing a FLNG project? Let us know your views below. To read Tom Haylock's previous article on "Why FLNG is a strong option for monetising gas resources", click here.
KANFA Aragon attended Gastech’s CoTEs programme last year. Gastech’s CoTEs programme (Centres of Technical Excellence) presents a series of free-to-attend seminars dedicated to deliver knowledge and awareness of technological innovations in the natural gas industry. To know more on Gastech’s CoTEs 2015, click here.
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