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Keppel O&M, SembMarine set for LNG shipbuilding foray Continued from Page 1

SembMarine added that the Gravifloat concept can be adapted to suit most soil conditions and upgraded for operations in more exposed and harsher environments.

The Gravifloat terminal can be built for regasification and liquefaction of LNG and eliminates, through its fixed installation in shallow waters of up to 20 metres, motion challenges typical of an FSRU or floating LNG. Its Gravifloat terminals can be built to 20,000-80,000 cubic metres to suit small-scale LNG requirements or expanded on a modular basis to service large LNG carriers.

SembMarine added that the Gravifloat concept can be adapted to suit most soil conditions and upgraded for operations in more exposed and harsher environments.

Of the 35 FSRU and near-shore floating LNG prospects that the industry identified worldwide, said Keppel O&M's Mr Chia, the majority is FSRUs, as lower oil-linked LNG spot prices support construction of import instead export infrastructure. He also expects that, at most, 10 FSRUs will take off in the next three to four years.

Having commenced talks with Golar LNG for a fourth floating LNG conversion at Keppel Shipyard, Mr Chia is also confident that industry players tend to take the longer-term view of the LNG export market, especially with the use of clean burning fuel proliferating beyond the JKM (Japan Korea marker) market.

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The dynamics of LNG market, noted Mr Chia, have evolved from large-scale onshore export projects underpinned by long-term offtake agreements between large producers - Petronas MLNG and Qatargas LNG - and big-time consumers in Japan, South Korea and Taiwan.

For some field operators, a long-term offtake agreement is still required to justify investment in a newbuild floating LNG, but vessel operators with access to financing such as Golar, stand to break out by opting to go with floating LNG conversions.

Golar's floating LNG concept, GoFLNG, is premised on delivering cost savings over newbuild units based on the conversion of second-hand Moss LNG carriers readily available in the market. By Mr Chia's estimate, using existing Moss LNG carriers will shave US$100 million alone from the construction of new storage tanks for floating LNG purposes.

Nonetheless, construction of the first of three Golar floating LNG conversions commissioned to Keppel - the Hilli FLNG - entered full swing only after Golar finalised a tolling agreement with the end client, Perenco.

With the blessings of the government of Cameroon, Perenco reportedly allocated 500 billion cubic feet of gas reserves in the Kribi fields to the Hilli FLNG, supporting 1.2 million tonnes per annum of output.

The local government is supportive of liquefying Kribi gas for export, which will fetch higher prices over piped gas. The limited pool of reserves at Kribi, however, meant newbuild floating LNG would not be economically viable for commercialisation, but which is made possible through the use of a converted floating LNG from Golar.

Mr Chia sees potential for further application of the Golar floating LNG - pegged to 1-2.5 million tonnes per annum throughput - in helping more independent field operators monetise other gas prospects off West Africa.

Golar was appointed mid-stream partner of Ophir Energy, for the development of Block R gas resources off Equatorial Guinea. Mr Chia expects the Gimi FLNG - earmarked for Ophir Block R - and also the Gandria FLNG to reach final investment decision in 2016.

The trio of Golar floating LNGs are to be equipped with Black & Veatch single-mixed refrigerant (SMR) process for liquefying natural gas.

In seeking to free up deck space of a floating LNG from installed liquefaction facilities, Keppel O&M has separately developed the PreNEx micro-LNG plant system. Mr Chia said that the use of nitrogen, a non-flammable gas as the refrigerant in PreNEx meant that most of the equipment can be stored below deck.

He added that PreNEx boasts a lower equipment count than the dominant SMR system and is thus more space efficient. Keppel O&M is looking at applying its proprietary PreNEx technology in further floating LNG projects.