FLNG Trending Smaller, Nearer to Shore

Copyright © 2021 Energy Intelligence Group

The future of floating LNG (FLNG) projects is likely to trend toward developments that are smaller in scale, closer to shore and more readily electrified, according to Arnaud Pieton, CEO of engineering and construction giant Technip Energies.

“The pipeline of opportunity, or early engagement for concept selection around FLNG, is more and more toward the near-shore, mid-scale, small-scale LNG solutions,” Pieton told the Energy Intelligence Forum 2021 virtual conference this week.

He said the trend will require Technip, a major contractor in the construction of LNG projects, to “reinvent ourselves a little bit."

Inefficiencies Be Gone

The sector to date has largely been defined by multi-train megaprojects onshore and costly floating projects characterized by their inefficiencies and ballooning price tags.

Like other sectors of the oil and gas industry, particularly the offshore sector, LNG developers have been forced to think more about standardization and the “reuse” of engineering to “maximize the brain cells that have been put on the table in order to tackle a concept,” Pieton said.

Coral South

Pieton touted the success of the Eni-operated Coral South floating LNG project, which he said is due to set sail on schedule from South Korea to Mozambique next month. The floating liquefaction plant, due for start up in 2022, has a capacity of 3.4 million tons per year of LNG, all of which will be sold to BP under a long-term offtake contract.

That project is far smaller than the $20 billion, 13 million ton/yr Mozambique LNG onshore development, where operator TotalEnergies declared force majeure this year due to jihadist violence in the African country.

Pieton said the current wave of LNG development is “absolutely not over,” although he doesn’t expect many new entrants to compete in the space beyond the ones who have already established themselves.

Decarbonization Theme

But “pretty much all” future LNG development will be “influenced by the decarbonization theme,” with operators eyeing emissions cuts anywhere from 25% to 40%.

That plays to the advantages of small- to mid-scale projects that can be modularized and electrified using available solar or wind power, he said.

Pieton said he has had talks about decarbonized and modular LNG projects in numerous regions, including Russia, Australia and North America.

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