FLNG technology to emerge as a key contributor in the global transition to clean energy
Natural gas is among the most integral sources of energy in the modern world, accounting for nearly one-third of the total growth in energy demand over the past decade. Liquefied natural gas, particularly, is set to play a major role in the global transition to clean energy sources.
As a result of this, floating liquefied natural gas or FLNG technology has emerged as a robust solution for power operators to capitalize on this growth. According to estimates from Global Market Insights, Inc. the global FLNG market size is poised to exceed $78 billion by 2024.
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Floating LNG facilities are also gaining significant momentum as an option for development in situations where inadequate infrastructure, security issues and other factors make onshore liquefaction of natural gas challenges.
Small/Mid-Scale floating LNG facilities will help unlock and monetize stranded gas reserves
The presence of natural gas reserves in offshore fields worldwide is vast; however, development of many of these resources is difficult due to technical, economic and geographical limitations. Several natural gas reserves are found in remote locations that lack infrastructure for physical pipelines creating major economic challenges to the delivery of natural gas to consumers.
FLNG technology has emerged as a viable solution to these challenges in recent years. By complementing conventional onshore LNG operations, floating LNG facilities can help explore and commercialize these untapped gas resources, to accommodate the steady rise in demand.
One of the ways floating LNG facilities support monetization of stranded natural gas reserves is by capturing and converting stranded gas into LNG at the production site. Onsite gas liquefication on FLNG vessels allows operators to improve environmental performance by reducing flaring or venting of the gas, creating a transportable and valuable product.
Small/mid-scale floating liquefied natural gas vessels, in particular, play a major role in monetizing otherwise untapped gas resources and ensuring delivery of LNG from producing regions to end-use industries. These vessels are gaining significant momentum in recent years owing to benefits such as shorter development schedules and low capital costs, among others.
For instance, in March 2021, New Fortress Energy LLC sanctioned a 1.4 million metric ton/year floating LNG project to be deployed anywhere stranded gas is present, as part of its venture into the offshore liquefaction space. The project, called Fast LNG, involves two jackup oil rigs equipped with small-scale modular liquefaction trains, and will focus on delivering LNG to industries with limited access to the fuel. The FLNG facility is designed to be deployed quicker than traditional FLNG technology that uses larger trains, at more economical costs.
Strategic collaborations will play key role in optimizing upcoming floating LNG projects
Despite accounting for a smaller share in the overall LNG market at present, the FLNG industry is starting to generate increasing interest in recent years. In order to optimize the success of future floating LNG projects, major industry players are focusing on collaborative efforts to ensure consistent technological advancement.
To illustrate, in January 2021, Transborders Energy Pty Ltd announced a multi-projectm multi-party FLNG Solution Framework Agreement, with several global entities, including TechnipFMC, Kyushu Electric Power and others. This first of its kind collaborative arrangement is aimed at deploying Transborders’ FLNG Solution to collectively monetize various offshore gas resource projects that are discovered but stranded.
Originally considered as a solution to explore stranded or remote gas reserves, the scope of the FLNG industry is broadening consistently. FLNG technology is being increasingly used in both shallow and deep waters and has also demonstrated high potential in gas production from onshore fields. In essence, the FLNG industry is likely to serve as a leading force in a future energy era defined by high competition and environmental impacts.
