energycurrent.com: Shell to issue tender for FLNG project

Filed from Houston
3/11/2008 7:09:49 PM GMT
 
THAILAND: Shell will issue an international tender within the next four months to selected consortia, formed from shipyards in Japan and Korea and international engineering procurement and construction contractors, for a floating liquefied natural gas (FLNG) construction project, said Jon Chadwick, vice president of Shell Gas & Power’s Asia operations, at GasTech 2008 in Bangkok this week.

Shell has settled on a “design-one-build-many approach” to its FLNG design, which is cyclone tolerant and features a 3.5 million tons/year LNG facility with additional hydrocarbon liquids capacity and is 1,476 feet (450 m) long by 246 feet (75 m) wide.

Shell has been seriously studying FLNG technology for some time. “We have devoted substantive engineering hours to FLNG and we now believe that the time for FLNG has come.  The market circumstances and the environmental circumstances lead us to believe this is the case,” Chadwick said.

“FLNG offers a route to greater flexibility, and increased access to natural gas resources far from shore. FLNG also enhances our ability to operate responsibly in environmentally sensitive areas.

“Overall, this technology increases the rate at which we can expect to get LNG into the world’s energy-hungry markets,” Chadwick said.  “We need to develop and we need to have the courage to deploy technologies that will enable us to unlock new resources and ensure continued reliability and efficiency in existing and planned LNG operations.”

Chadwick also unveiled details about the company’s new LNG technology, “Shell Automated Cool-down,” which specifically targets reliability in existing LNG operations by addressing the problem of bundle tube leaks in Main Cryogenic Heat Exchangers at LNG sites.

These leaks can cause unexpected unit shutdowns, said Chadwick. Shell’s technology reduces the risk of leaks through certain automated processes. Application of the technology leads to rapid start-up and less flaring with no operations outside the design envelope.

“You can think of this technology as kind of an ‘autopilot’. It gives operators better control over the cool-down procedure. It takes over the manual action, allowing operators to concentrate on overall cool-down and ramp up. The net result is greater reliability, better safety, and an overall improvement in operational performance,” Chadwick said. The technology is being implemented at an LNG facility where Shell has an interest.

With LNG accounting for about seven percent of global gas consumption in 2007 and global LNG demand growing at around eight percent to 10 percent per year, suppliers face the challenge of bringing on new capacity to market as costs of new production “are rising relentlessly.”

“We urgently need new infrastructure and new production capacity to help address potential long-term supply/demand imbalances,” Chadwick said, adding that the current tight LNG markets are at least partly the result of lower investment levels up to a decade ago, caused by a slump in LNG prices.

LNG’s nature as a long-term business that requires developers and operators to make long-term investments and commitments means that maintaining the tradition of long-term partnerships is needed for LNG’s continuing success.

While LNG spot trading has grown in recent years, Chadwick said it is most unlikely to constitute a material proportion of LNG sales in the Asia-Pacific arena.

“Here in Asia Pacific especially, long-term agreements have yielded the security of supply and security of demand that provide the foundation for future success and stability,” Chadwick noted.

http://www.energycurrent.com/index.php?id=2&storyid=9328

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