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Interest falling for floating LNG production ships.

A report by Reuters suggests interest is fading for floating liquefied natural gas (FLNG) projects, as gas producers seek cheaper ways to compete with a surge in U.S. shale supplies and slumping prices. FLNG projects--mega-vessels fitted with gas production, liquefaction and storage capabilities--allow producers to tap offshore gas wells and ship LNG without having to build pipelines to onshore plants. Owners can move the vessels to new fields when production at an old one ends, slashing asset end-of-life costs.

The projects were popular with producers in the early-2010s when gas demand and prices were rising, and before the shale revolution unlocked U.S. reserves that crushed global prices. Woodside Petroleum has shelved plans to build the $30 billion Browse FLNG project off western Australia because of global oversupply of LNG. GDF Suez and Australia's Santos also scrapped a proposed FLNG project for the Bonaparte gas field off northern Australia. "With the market headed for oversupply until the early-2020s, it would be difficult to find a bankable new FLNG project in the near term," Edmund Siau, a gas analyst at energy advisory FGE, told the news service.

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Title Annotation:WORLDNEWS
Publication:Pipeline & Gas Journal
Date:Apr 1, 2017
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