FLNG forges ahead in Africa

Global LNG supply is set to race ahead of demand, but floating LNG projects are forging ahead, and they are doing so in Africa, backed in part by China. The continent's first FLNG vessel has been completed and is due to reach Cameroonian waters in November.

The Hilli Episeyo has been built by Singapore's Keppel Shipyard for use on the Kribi LNG project in the Gulf of Guinea. Similar vessels will soon be launched for use offshore Equatorial Guinea and Mozambique, with others in the pipeline, making Africa, and in particular the Gulf of Guinea, a focus of global FLNG interest.

The Hilli Episeyo will become only the second operational FLNG vessel ever commissioned, after Petronas' project offshore Sarawak, and it is the first ever FLNG conversion. The vessel, which will be owned and operated by Golar LNG, was originally constructed in 1975 as a 125,000 cu m LNG carrier. It will have liquefaction capacity of 2.4 million mt/year and will be supplied with natural gas by Perenco Cameroon and the national oil company, Societe Nationale des Hydrocarbures du Cameroun.

The Equatorial Guinean project, Fortuna FLNG, will have 2 million mt/year capacity and is entirely owned by Ophir Energy. Although a final investment decision on the project has not yet been taken, Ophir awarded the main upstream contract in early October to the Subsea Integration Alliance, which comprises Schlumberger offshoot OneSubsea and Subsea 7.

The FID is expected soon and first gas is scheduled by 2020. The Keppel Shipyard is already converting the LNG carrier Gandria, which has been earmarked for use on the scheme, for Golar LNG.

On the other side of the continent, Eni took the FID on its 3.4 million mt/year Coral South FLNG project offshore Mozambique in June. Eni has chosen RINA Services to design and produce the subsea infrastructure for the venture, while Samsung is building the FLNG vessel.

Meanwhile, NewAge LNG plans another FLNG venture in Congo-Brazzaville. It will be the smallest of the African projects at 1.2 million mt/year, but gives Africa four of the world's seven advanced FLNG schemes.

FLNG is pushing ahead in Africa because companies want to test a new technology that promises to open up numerous otherwise stranded deepwater gas reserves. Many African countries have limited or non-existent domestic gas markets, so LNG for export is the best form of commercial development.

As FLNG projects are smaller than their onshore counterparts, they will have less impact on a market in surplus. They also avoid the risk of political and social instability that has affected onshore LNG plants in other parts in Africa, such as Libya and Nigeria.

Notably, some of the funding for the four projects has come from China.

Beijing is keen to secure access to more sources of LNG and is seeking to promote more technically-advanced manufacturing as it rebalances its economy; and is investing massively in Africa on geopolitical and economic grounds.

FLNG engineering fits the bill, so, as the boom in offshore rig building winds down, it is likely that Chinese shipyards will turn their attention to FLNG vessels.