A Decision Method at the Concept Select Stage for Choosing Onshore LNG or Floating LNG Production Facilities for Large Offshore Gas Discoveries

Abstract

Objectives/Scope Several offshore areas with large gas discoveries (> 2 Tcf of reserves) that are distant from markets now have 2 different LNG development options. The first is the classical onshore LNG production facility and the second is the offshore floating LNG (FLNG) production facility, a comparatively new development solution. This paper examines both options from technical and economic perspectives and proposes a method for selecting the best development solution at the Concept Select stage. Methods, Procedures, Process Appropriate gas production profiles and costs including DRILLEX, CAPEX and OPEX were determined for 2 remote prospective gas basins areas - Australia's North West Shelf and the Rovuma basin offshore Mozambique. Both areas have comparable physical settings in terms of reserves, reservoir depth, water depth and distance to shore but they are different from a gas industry maturity perspective. Australia's North West Shelf has both onshore LNG facilities and the Prelude FLNG in operation and is a mature oil and gas area with significant local construction and operational experience. Mozambique's Rovuma basin now features the Coral South FLNG in production, and several onshore LNG production facilities are being planned. However the latter area is in the early phase of building upstream construction and operational expertise. The technical analysis was based on a comparison of key physical settings and project parameters such as production profiles, costs and schedules. This was performed for both FLNGs and onshore LNG production facilities in the 2 mentioned areas. The economic analysis was based on detailed after-tax cash flows of all technical options and provided the key economic metrics for both types of solutions in both areas. Where appropriate a portfolio analysis was performed to include the effect of being in tax positions with multiple units (FLNGs) in operation. Results, Observations, Conclusions The technical and economic analyses were combined to create decision tables for both mature and less mature areas. These tables can be used as a tool at the Concept Select stage to determine under which conditions that an FLNG (or several) is a preferable development solution to onshore LNG, and vice versa. The method was applied to relevant examples. Novel/Additive Information The floating LNG production facility is a relatively new development solution for remote offshore gas discoveries compared with the classical onshore LNG supplied with offshore gas. The novelty of the developed decision tables is that they provide a simplified approach for making high level decisions on whether to choose onshore LNG or floating LNG production facilities at the Concept Select stage.