The gradual evolution of floating LNG (FLNG) technology has been under way for decades. But Shell’s decision to proceed with the world’s first such project, and one that also will be the largest offshore floating facility in existence, is a major breakthrough for accessing and commercializing previously unreachable gas.

While the headlines that greeted the announcement were almost entirely focused on its size and financial scale, for some, the most impressive aspects of the innovative FLNG design that will be used on the operator’s Prelude field offshore Australia lie in the detail.

FLNG production, storage, and offloading concepts (also known as LNG FPSOs) have been discussed and evaluated in various forms without ever reaching commercial reality. This progression along a development path is typical for a capital-intensive emerging technology.

Because of buoyant LNG and crude oil prices and diminishing opportunities for conventional LNG projects, the concept has received a major injection of impetus.

The underlying reasons behind its requirement are sound. The FLNG concept holds a number of advantages over conventional liquefaction facilities for offshore resources. One of the most obvious is the ability to station a vessel directly over gas fields in remote or “stranded” locations. Avoiding the high cost of long-distance offshore pipelines is another. As well, the flexibility to move the facility to a new location once an existing field is depleted – very much the same thinking used in successfully deploying FPSOs – is a desirable capability for operators.

The concept also helps operators avoid potential pitfalls such as an onshore LNG plant’s environmental footprint.

Another positive aspect is that cost savings are achievable during the construction process, with floating production units such as the Prelude facility to be built by an experienced company in a modern shipyard environment with a skilled workforce. This shortens the development and construction schedule.

Shell’s FLNG design was streamlined after more than 600 engineers labored for more than 1.6 million man hours on different FEED options.

Technical hurdles

Technical challenges have been and remain significant. This one reason why a major operating company is the first to take the plunge into a firm FLNG project.

Those technical challenges have been overcome because much of the technology developed to take LNG production offshore has been evolutionary rather than revolutionary. All of the solutions employed on the FLNG facility are adaptations of technologies applied already in either offshore oil production or onshore liquefaction. This is why Shell will has been comfortable with proceeding with such a significant first step.

Gas resources are found all over the world in remote offshore accumulations. Offshore Australia alone there is an estimated 140 Tcf of stranded gas, according to a 2008 report by the Commonwealth Scientific and Industrial Research Organization.

According to Shell, FLNG can accelerate global LNG developments because an FLNG vessel can be ordered at an earlier stage of field appraisal, with less guarantee of production longevity than is needed to underpin an onshore greenfield investment.

Production challenges

Relocating an FLNG facility from one field to another can be commercially tricky. No two gas fields are alike, so a facility’s processing and gas pretreatment sections could need costly and time-consuming retrofits to make it suitable for its next location. The extent of this work, or whether the operator may be prepared to tolerate suboptimal performance on the second field, will depend on factors such as the timing of the move within the unit’s economic life and whether gas monetization is fundamental to the overall economics of the field development.

There also is the question of how to deal with reserves depletion curves and the required level of later-life investment in further drilling and compression capacity to sustain a field’s production plateau, as FLNG’s high investment requirements mean the economics may not stand long, slow depletion profiles.

Liquefaction processes also require high feedgas pressures, providing an additional rationale for higher feedgas compression costs.

The vessel eventually will be permanently moored 200 km (125 miles) offshore northwestern Australia for 25 years. The new FLNG vessel will be built by Samsung Heavy Industries at its Geoje Island shipyard in South Korea and will measure 488 m (1,601 ft) from bow to stern. The yard is one of the few in the world big enough to construct a facility of this size. When fully equipped and with its storage tanks full, the facility will weigh around 600,000 tonnes, with some 260,000 tonnes of that being steel.

The Prelude FLNG vessel will measure 488 m from bow to stern.

The project

Neil Gilmour, general manager of Shell’s Prelude FLNG project, described the technology as groundbreaking. “It has the potential to change the way we produce natural gas,” he said.

More than 600 people globally spent more than 1.6 million hours working on different FEED options for the facility. “This has never been done before,” Gilmour said. “We had to find ways to adapt our technology for offshore.”

Space on deck on a floating production facility is some of the world’s most expensive real estate. To minimize the deck footprint, engineers designed components that stack vertically. The operating plant, for example, will be placed above LNG storage tanks.

Shell also came up with the idea of using cold ocean water to help cool the gas, avoiding the need to for extra equipment on deck. “For LNG you need a cooling medium, like in your fridge at home,” explained Gilmour. “We’ve invented a system to take water from deep in the ocean.”

An assembly of eight 1-m (3-ft) diameter pipes will extend from the facility to about 150 m (490 ft) below the sea surface. It will deliver around 50,000 cu m of cold seawater each hour, helping to cool the gas.

Produced LNG, LPG, and condensate will be stored in tanks in the hull, while LNG and LPG carriers moor alongside to offload the products.

The space-saving initiatives have worked well – despite the vessel’s large proportions, the FLNG facility will be one-quarter the size of an equivalent plant on land.

As far as surface systems go, Shell has gone “super-size” with the Prelude project. But it is likely to be just the first of an increasing number of similar developments eventually going ahead around the world -- Flex LNG’s scheme offshore Papua New Guinea, Woodside/Shell’s Greater Sunrise in the Timor Sea, and the GDF Suez/Santos Bonaparte project, also in the Timor Sea. All of these and more will almost certainly be in areas where previously gas production would have been economically as well as technologically impossible.

In the constantly evolving sector of production optimization, the first successful implementation of practical large-scale FLNG technology is a breakthrough that will enable vast and otherwise unrecoverable reserves to be produced.