The evolution of FLNG concepts and costs

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Giles Farrer, Research Director for Global Gas and LNG Supply, Wood Mackenzie
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Asia Pacific was the first region to move Floating LNG (FLNG) forward, but other regions are now following suit. PETRONAS’s PFLNG 1 project and Shell's Prelude project will be located in Malaysia and Australia respectively. Activity levels now look set to shift to Africa.

Golar is securing its position as the leading provider of near-shore FLNG solutions, with a focus to date on West Africa. The company took a final investment decision (FID) on an FLNG project with Perenco in Cameroon in 2015.  In addition, it is pursuing development of Fortuna FLNG in Equatorial Guinea with Ophir Energy, and is understood to be in the frame for an FLNG development on KOSMOS' vast gas resources in Mauritania and Senegal. While not necessarily offering the same economies of scale as a land-based solution, an upstream subsea development tied back to a near-shore FLNG facility has the potential to offer early cash flow. Smaller LNG volumes could make marketing easier in today's subdued gas market.

There have also been major developments in East Africa, at ENI’s Coral FLNG project in Mozambique. The project has substantially lowered estimated costs by operating a competitive FEED tender and scaling up capacity. This, along with successful marketing, (it sold its entire proposed capacity to BP) makes it the FLNG project we think most likely to go ahead next.

Want to know more? Wood Mackenzie’s Global FLNG Overview 2016 provides deep insight into the status, costs and key success factors of the industry’s leading projects and companies.

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