Floating LNG May be Key to Repositioning Gas in Africa

For over 50 years, Liquefied Natural Gas (LNG) has existed as a means of transporting huge amounts of natural gas over long distances. The first commercial LNG (Liquefied Natural Gas) plant was delivered in 1964, in Arzew, Algeria, and the first commercial trade of LNG occurred in 1964 between the UK and Algeria.

As estimated in the International Energy Outlook 2016 (IEO2016), consumption of natural gas worldwide is projected to increase from 120 trillion cubic feet (Tcf) as measured in 2012 to 203 Tcf in 2040.

Today, the growing demand for LNG, coupled with environmental and community challenges, high costs of infrastructure and slow time-to-market for land-based LNG projects has encouraged several leading LNG players such as Shell, Petronas and ExxonMobil to develop Floating LNG plants as alternatives to land-based plants.

A Floating LNG (FLNG) system is a FPSO (floating production, storage and offloading) vessel with an onboard plant that collects natural gas, converts it to LNG and loads it onto tankers for distribution. FLNG will be used for gas fields that are far from shore, thus removing the need for a pipeline.

FLNG technology is expected to save cost and time, helping the operators to meet the growing energy demand by unlocking gas resources from hard-to-reach underwater fields with the cleanest-burning hydrocarbon. It will be especially useful for small and medium-size gas reserves in Africa

Erecting gas distribution infrastructure around Africa and integrating industrial and economic development at local and regional levels is vital to the development of the Continent’s oil and gas industry.

The offshore West & East African regions are considered as high potential areas for FLNG development due to the large numbers of offshore gas deposits, and various African nations have committed or are seriously considering the prospects of deploying and investing in FLNG facilities.

In East Africa, Italy’s Eni plans to bring into production 140 billion cubic meters of gas through the construction of a FLNG plant in the Rovuma basin, offshore Mozambique. The plant is expected to have a capacity of 3.4 million tons/year, supplied by 6 subsea wells with start-up in 2021.

In West Africa, FLNG projects are being developed to provide additional power generation to countries like Equatorial Guinea, Cameroon, Ghana, Senegal and Ivory Coast, among others.

Ophir Energy is currently developing the Fortuna FLNG project in Equatorial Guinea. The Fortuna project entered the Front End Engineering Design phase in July 2015 and the final investment decision (FID) is expected in 2017, with the first gas forecast for 2020. The field is expected to produce 2.2mmtpa and Ophir currently has an 80% working interest.

One advantage of FLNG plants over onshore plants in West Africa is increased security. FLNG plants are less accessible to would-be attackers or saboteurs because of their locations, and they can be enhanced with other defensive measures such as remote monitoring and barriers.

With FLNG still in its nascent stage, Africa and indeed the world is watching closely to see if the current FLNG projects will be delivered on time and within budget, and if they will perform as expected. The success of the initial set of FLNG plants will establish the technology as a viable alternative to onshore LNG plants.