Floating LNG Solutions from the Drawing Board to Reality (2002)

Abstract Production of LNG directly at offshore oil and gas fields has potential to unlock significant resources at deepwater locations. This paper summarises Shell's ongoing technology developments aimed at practical, safe and economic floating production systems to deliver oil/condensate and LNG from the same unit. The key technical building blocks and their development status are discussed, and the solution for oil fields and gas fields compared. Prospects for application of the two concepts are introduced. Background The Deepwater Challenge. The world's oil and gas industry is facing significant challenges in the deepwater offshore hydrocarbon basins. Some 85% of deepwater discoveries in basins outside the Gulf of Mexico are smaller than 500 million barrels (bbl) and many are currently uneconomic to develop. Of the larger field sizes, a significant proportion consists of non-associated gas reservoirs in locations remote from pipeline infrastructure and gas markets. The Associated Gas Problem. Most remote deepwater oil discoveries rely on a technically achievable and cost effective gas disposal solution to make oil production economically viable. Frequently such nuisance gas is reinjected. However, in many cases, gas injection is detrimental to reservoir performance and Shell has reviewed the technical and commercial feasibility of numerous possibilities in its search for a new stand-alone associated gas disposal solution. By a considerable margin, the Liquid Natural Gas (LNG) solution has been shown to be the best from both a costs and operability perspective. The development concept for oil fields with associated gas liquefaction, LNG storage and export is called FONG (Floating Oil and Natural Gas). Production of both oil and LNG products from one single production unit increases the total product sales value and subsequently reduces the economic threshold for development. The critical success factor has been to keep the processing, product storage and export innovatively simple. The Non-Associated Gas Opportunity. For non-associated gas, production of LNG directly at the field should provide a lower cost development solution than the alternative of long distance (100-500 km) transport to an onshore gas/LNG plant. In the mid-nineties (1996), Shell initiated studies on the possibility to place a gas liquefaction plant on a floating barge. These studies confirmed that the concept was technically feasible, but required upscaling from 2 to 4 million tones per annum (mtpa) capacity to become economically attractive. The development concept for gas fields is called FLNG (Floating Liquid Natural Gas), and it is in the project development stage in both West Africa and Australia. This paper describes the development of FONG and FLNG and specifically addresses some of the unique features which give Shell the confidence to progress Front-End Engineering Design (FEED) studies. Common Technical Challenges Both FLNG and FONG technologies build on existing production experience with onshore LNG plants, LNG Shipping and offshore FPSO (Floating Production, Storage and Offloading) installations (Figure 1). This is however, not without challenge as one cannot simply build an onshore LNG plant on a barge, or just add LNG facilities to an FPSO unit.