KPMG research: FLNG at pivotal point

KPMG research: FLNG at pivotal point

After a lengthy period of research and development starting in the 1970s, FLNG industry is entering a critical period, stands in new KPMG’s research.

With the world’s first four FLNG projects due to enter service between 2015 and 2018, the LNG industry will be keen to see whether these plants are delivered on-time and on budget – and whether they perform well – with no serious design or operational flaws. Sixteen other FLNG projects have been announced as probable and 21 as possible, KPMG said in the report “Floating LNG: Revolution and evolution for the global industry?”

FLNG is now being viewed as an attractive alternative to traditional land-based plants. As the experience is gained, FLNG could offer significant cost and schedule reductions, making future LNG supply more competitive, diverse and market-responsive, stands in the research.

Proponents will weigh the 10 key reasons, some of which are unlocking smaller fields, accessing remote fields and reducing environmental footprint, to consider floating LNG when making an investment decision. In some cases, onshore or floating solutions may both be viable. In others, the choice will be between a floating system or no project at all. As standardization and experience drive down costs, FLNG may widen its reach, according to the report.

FLNG is not radically different from other projects the industry is familiar and comfortable with. It does, however, present some novel challenges – less on the technical side and more to do with the supply chain, project management, stakeholder engagement, financing, regulation and tax.

Floating plants can emerge as part of a more diverse, faster, cheaper and more agile global LNG industry. As NobuoTanaka, Global Associate for Energy Security and Sustainability Institute of Energy Economics, Japan, observes, such continuing innovations are essential to delivering the IEA’s forecast ‘Golden Age of Gas’.

LNG World News Staff; Image: Shell

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