Right now, there is a lot of action underway in South Korea in Samsung’s Geoje shipyard.
“There, one of the most remarkable gas plants you could ever imagine is taking shape,” explained Matthias Bichsel, projects and technology director, Royal Dutch Shell plc.
The demand for natural gas is growing globally. Fortunately, gas is plentiful, widespread and clean burning. It is an ideal power generation fuel. But some of the world’s gas fields are found under the ocean, far from the mainland. The cost of developing those resources might have been prohibitive without the technological and commercial innovations that led to the floating liquefied natural gas (FLNG) concept. Shell’s FLNG projects can turn economically challenged offshore gasfield developments into new sources of clean energy, new jobs and new revenue streams for governments and business partners. And so is the case with Shell’s Prelude FLNG. Once complete, it will be the largest floating facility ever built.
Bichsel discussed the project recently at the Innovation Open House in Canberra, Australia.
“The plant is unique in many respects,” he said. “For example, it’s the first time a liquefaction plant has been so intimately connected with a gas-production system. That’s a bit like building a flour mill on top of a combine harvester — the raw material from a field goes in and a consumer product comes out.”
As well as producing LNG, the plant will produce two other gas-derived liquids — liquefied petroleum gas (LPG) and condensate. And it will store all three products and safely offload them onto the ships that transport them to where they are needed.
“But what really sets it apart from every other LNG plant that has ever existed is the fact that it is designed to go to sea,” said Bichsel.
The promise of gas
The facility will be moored above Australia’s Prelude offshore gas field, 200 kilometers from the nearest shoreline. And there it is expected to remain for some 25 years, producing LNG, LPG and condensate.
“They say, ‘necessity is the mother of invention,’ and could there be a greater necessity than to provide energy to a world with a growing population?” asked Bichsel.
It is estimated by 2050 there will be 9 billion people on the planet, up from slightly more than 7 billion today. The number of road vehicles is forecast to more than double. And many more people throughout the world will have access to electricity — for lighting, refrigeration and cooking. As a result, total energy demand is expected to be at least twice the level it was at the turn of the century.
“And if you add to this the imperative to cut carbon dioxide emissions, well, then you have quite an equation,” said Bichsel. “Most analysts, not least those at the International Energy Agency (IEA), believe to have future supply equal future demand — to solve the energy equation, in other words — we will need to call on a range of energy resources.”
To that end, natural gas stands out among the possible options. Between 2010 and 2050, while demand for both coal and oil is forecast to peak and then decline, gas demand is set to go only one way — and that is up.
“At Shell, we fully support the logic and validity of this forecast,” said Bichsel.
He outlined three main reasons for the emphasis on natural gas as an energy source.
“Gas is acceptable, affordable and abundant,” he said. “The carbon dioxide emissions of combustion are the lowest of any fossil fuel. Moreover, it doesn’t give off the unhealthy pollutants and particulates associated with coal. We see what’s happening in China, where the impact on air quality of coal-fired power stations is alarming.
“Power generation is expected to account for two-thirds of the increased energy demand in Asia over the next 20 years. Gas surely has to be a part of the long-term answer there.
“The cost of building a gas-fired power plant, per megawatt-hour of electricity produced, is estimated to be less than half that of a coal-fired plant. Incidentally, it is a fifth that of a land-based wind farm, and a tenth of an offshore wind farm.
“The IEA has estimated global gas resources amount to 800 trillion cubic meters — enough to last 230 years at current levels of consumption.”
Bichsel put that into perspective, explaining most of that 230 years’ supply of gas is not simply on tap, ready to be connected to your stove. Some of it is lying in geological formations far from markets, and some of it is widely dispersed and only trickles into wells.
“This is not all ‘easy’ gas, by any means,” he said. “Still, tremendous technological advances over the past several years have made it worthwhile to pursue some of this bountiful gas.
“New seismic-survey methods, new drilling techniques and new production technology have all contributed. We have also seen LNG become an established global industry and gas-to-liquids chemistry emerge from the laboratory. These developments can now be integrated into projects that extract gas from under the ground and process and deliver it in a useable form to where it’s needed most — in population centers all around the world.”
A 15-year journey
FLNG was originally developed to help realize the promise of natural gas — specifically, to bring gas to the global market from small offshore fields in areas lacking infrastructure — especially pipelines.
“As many as half of those ‘stranded’ gas fields are thought to lie in Australian waters,” said Bichsel. “The Prelude field is a perfect example, and so it was deemed to be an ideal candidate for the first FLNG project.”
Work on FLNG began at Shell in the mid-1990s — 15 years or so before the decision to go ahead with Prelude. Just defining the concept underlying the FLNG facility took 1.6 million hours — the equivalent of 800 years’ work. Eventually, more than 600 engineers became involved. They carried out feasibility evaluations, conceptual studies, safety and environmental assessments, and market and economic analyses. And this was all before the final investment decision.
Today, some 5,000 workers are busy at the shipyard in Geoje — one of the few with a dry dock large enough to accommodate the construction. Some of those workers are currently preparing for the installation of the 100-meter-high turret mooring structure that is being built by another 1,000 people in Dubai.
“As the concept has been developed, the realization has grown that the FLNG technology has more to offer,” said Bichsel. “Shell’s view of its potential applicability has widened.
“This is also a feature of innovation — something new is created and that stimulates people to question how they normally do things, and that in turn leads them to create more new things. The best innovation is infectious in this way.
“FLNG is now increasingly being seen as a potential route to the development of offshore gas fields of various sizes — even field clusters, perhaps — where subsea pipelines are an issue or the onshore element of the project is uncertain or constrained. This could be for any number of reasons: technical, political, economic — or indeed environmental.
“In this regard, FLNG provides unprecedented flexibility. Upfront infrastructure investment is no longer an issue. And, unlike land-based liquefaction plants, an FLNG facility can be redeployed. For these reasons, FLNG makes it possible to consider the development of less-certain prospects: fields where the amount of gas or the recovery level cannot be predicted with complete confidence.”
FLNG is creating opportunity to stake out a niche position in industry.
“FLNG is such a good case study in innovation because it meets a vital need, stimulates engineering ingenuity, opens up exciting commercial opportunities and stands to create real value on so many levels,” said Bichsel.
To view time lapse and stills from the launch of Prelude LNG’s hull, visit www.shell.com/flng.
