With Japanese companies looking for the next alternative to nuclear power, many are hoping to climb aboard floating plants that are drilling offshore for natural gas, in nearly a dozen projects under way around the world.
These so-called floating liquefied natural gas (FLNG) projects involve vessels that are floating above offshore gas fields and are equipped with facilities to produce natural gas and then chill it into liquid form for storage and transport.
LNG is attracting growing international attention as a potential alternative to nuclear power as a fuel for thermal power plants. Japanese companies are now accelerating efforts to explore new business opportunities in FLNG projects.
The Japanese government is also showing strong interest in offshore gas development using FLNG technology.
This new technology, which has yet to be deployed commercially, is expected to open a new era of commercial offshore gas drilling, since it is aimed at tapping into gas deposits too small or too far from the coast to be profitably exploited through a conventional onshore LNG processing plant.
The cost of building a FLNG vessel is estimated between 300 billion yen-400 billion yen ($3.9 billion-$5.2 billion), substantially less than the amount needed to build a shore-based LNG plant and long pipelines to bring the gas to shore.
"Most of the untapped gas fields in the world are located deep under the seabed and far from shore," says Kazuhiko Itano, managing executive officer at Japan's Inpex Corp.
There are about 10 FLNG projects that are either on the drawing board or already under way across the globe, including one off Papua New Guinea involving a Norwegian shipping company, according to Inpex.
In August, senior officials at the Ministry of Economy, Trade and Industry visited Brazil and called on the Brazilian government to forge ahead with the proposed project of Petrobras, a state-run oil company, to develop a gas field 300 kilometers off the coast using FLNG technology.
Japanese officials are also trying to promote FLNG projects in various parts of the world to lower costs and support Japanese heavy machinery and plant makers hoping to win contracts to build FLNG vessels.
On Sept. 15, Kawasaki Heavy Industries Ltd. won a contract to supply boilers for the floating LNG processing plant for the Prelude gas field, some 200 kilometers off the coast of Western Australia. The Shell FLNG project is believed to be the closest to the start of commercial production and would begin possibly in the second half of 2016.
On the Petrobras project in Brazil, IHI Corp. will likely supply LNG tanks that will be built along the processing plant on the FLNG vessel if the project is actually launched. Major Japanese plant makers are also hoping to land contracts to build FLNG plants.
One of the FLNG projects in the works will tap the Abadi gas field in the Arafura Sea, Indonesia, located some 2,600 kilometers east of Jakarta and 800 meters below the surface of the sea at its deepest. Inpex plans to start natural gas production using FLNG as early as 2018 at the Abadi field. In July, Inpex and Royal Dutch Shell Plc., a Dutch-British oil and gas giant with global operations, struck a deal to cooperate on the project.
The Abadi FLNG project involves chilling gas into liquid form with facilities on a 500-meter vessel moored above the gas field. The plant will produce 2.5 million tons of LNG per year, roughly equivalent to the output at a land-based LNG processing plant for a small to midsize gas field. After processing on the vessel, ocean-going LNG carriers will offload liquefied gas directly from the facility out at sea for delivery to Japan.
The Abadi gas field is some 140 kilometers from the nearest inhabited island. There is no area along the coast suitable for building an onshore LNG processing plant.
A project to develop the gas field with a conventional land-based plant would not have been economically viable. But FLNG technology has made commercial development of the gas field possible.
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