Home' Trinidad and Tobago Guardian : March 20th 2014 Contents Afloating liquified natural gas
(FLNG) project similar to what
was proposed to the Govern-
ment of T&T in 2009-2010, is
now being developed in
Colombia under the name Caribbean FLNG.
In response to an e-mail query, Independent
Senator David Small said on March 12:
"As I understand it, the project is a 0.5 mil-
lion tonne per year FLNG project with an
initial 5-year sales and purchase agreement
(SPA) for volumes to Gazprom and will also
be looking to regional markets as well.
"The gas---100 million standard cubic feed
per day (mmscfd)---will come from some
onshore fields and will be piped to the coastline
as clean dry gas ready for processing in much
the same way that Phoenix Park Gas Processors
Ltd (PPGPL) cleans up local gas before it is
sent to downstream users. This is an excellent
project that will move Colombia ahead of T&T,
as they have taken the risk decision to go
Asked how did this happen, Small said:
"This project was launched in 2011, and will
come onstream in 2015. They have been very
aggressive in seeing the potential and acting
on it. By comparison, T&T has dropped the
ball. Initially in 2009-2010, Excelerate Energy
and RWE made a proposal to the Government
of T&T for a 3 MTPA FLNG unit that could
have been ready in 36 months post-approval.
"Following the election in 2010, the con-
sortium brought the proposal forward again
to the then Minister of Energy, but it was not
a focus of the Government at the time and
the consortium eventually gave up in late 2012.
I am aware of this first-hand as from mid-
2011 to end 2012, I was advising the consortium
on the project."
The Caribbean FLNG vessel that China s
Wison Offshore and Marine business is con-
structing for Exmar BV s Caribbean LNG proj-
ect off the coast of Colombia, is a barge capable
of liquefying 0.5 million tonnes per annum
(MTPA) of LNG. It is expected to cost in the
region of US$300 million or US$600 per tonne
per annum of liquefaction capacity, lower than
the cost of land-based LNG facilities, and at
the lower end of the capital cost reported for
Operating costs are expected to be in the
region of US$1.50-US$2.00 per thousand cubic
feet of gas processed, lowering the minimum
economic size for a stranded gas resource.
This is expected to be the first FLNG vessel
in operation globally once it commences liq-
uefaction in 2015.
In addition, Wison has opened a second
fabrication yard that will provide it with the
capacity to leverage its FLNG expertise and
deliver larger vessels."
Royal Dutch Shell is also constructing The
Prelude, an FLNG vessel said to be the largest
ship ever built in the history of the world. It
has no motor and will be pulled to its des-
tination by a fleet of tug boats.
According to a Douglas Westwood analyst s
report out of the British company s Singapore
office, an entire industry of FLNG will slowly
unfurl over the next decade and a half. The
report is authored by analyst Amanda Tay.
Douglas Westwood is a UK-headquartered
energy business advisor with offices in Faver-
sham, Aberdeen, Canterbury, London, Hous-
ton, New York, and Singapore.
The World FLNG Market Forecast 2014-
2020 includes examination, analysis and a 14-
year view of FLNG expenditure, while the
World LNG Market Forecast 2013-2017 details
LNG trends by region and facility type. Both
documents are for sale.
However, T&T did not get beat to developing
an FLNG project, two other energy industry
leaders said in response to the same query
posed to Senator Small.
In an e-mailed statement from its press
office, Point Fortin-based LNG company
Atlantic said: "The article to which you refer
speaks to an offshore opportunity specific to
the circumstances of a particular project in
Colombia. This doesn t have any bearing on
Trinidad or Atlantic. So it s not a question of
being beaten to it."
According to the company, no such oppor-
tunity presented itself in T&T.
The company said, "At the moment all gas
produced in T&T is either exported or used
domestically. If further gas becomes available,
then all options can be evaluated at that time,
including whether floating LNG (FLNG) would
be viable as against other options (for example,
pipelines or land-based LNG facilities).
"As a large scale producer of LNG with a
comparatively low capital cost base Atlantic
is a competitive producer of LNG. Atlantic s
four trains constructed between 1999-2005
have a collective capacity of some 15 MTPA
of LNG, with a cost per tonne which is com-
petitive when compared to the cost per tonne
of the 0.5 MTPA FLNG facility mentioned in
the article to which you refer."
Atlantic was developed on the basis of mate-
rially lower oil prices---to which LNG prices
are generally linked---than those prevailing
today. Current prices and high demand for
LNG, particularly in Brazil and Argentina, have
resulted in strong financial performance for
Asked the same question posed to Small
and Atlantic, Energy Minister Kevin Ramnarine
said: "I am not sure what you are referring
to. FLNG is new technology. There is none in
operation in the world at the moment. Shell
is designing one for Western Australia. FLNG
would be applied to stranded gas that is of a
commercial quantity that justifies the invest-
ment (usually billions of US dollars). So I am
still not sure what Colombia has beaten us to.
I suspect that you are talking about the LNG
market for the Caribbean (that is, small scale
LNG for the smaller islands). I am not sure."
When told it was not just Shell and that a
whole FLNG industry is about to unfurl, he
added: "Floating LNG cannot be applied for
FLNG sake. It has to be applied where gas
cannot be evacuated by pipeline and where
such volumes (of gas) are commercial."
On March 12, Australian Stock Exchange-
listed company Cott Oil and Gas announced
that it had engaged the Houston office of
Wison Offshore and Marine to deliver a con-
cept study for a floating liquefied natural gas
vessel suitable for the Pandora Gas Field off-
shore Papua New Guinea.
MARCH 2014 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
T&T beat to FLNG by Colombia
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