Brian Songhurst: FLNG - What is new and is it really safe?
FLNG – What’s New And Is It Really Safe? Interview by Helen Winsor, Oil & Gas IQBrian Songhurst, director of LNG Energy and Power, speaks to Oil & Gas IQ about advancesin FLNG technology over the past year and pinpoints the areas that still require development.Oil & Gas IQ: Hello and welcome Brian. Thanks very much for joining us. To start, do youfeel that there have been any significant advances in FLNG technology over the last year?B Songhurst: I think the most significant events are probably two-fold; firstly is that Shell andPetrobras are both awarded major front-end engineering design studies and I see that as areal measure, a significant milestone in moving floating liquefaction forward.I think the other development that is really starting to help shape the future is the developmentof liquefied Natural gas (LNG) hoses which are starting to be used quite expensively now byExmar, and I think that is going to certainly help a lot with the issue of weather and significantwave height in terms of availability of unloading systems. So yes, I do, I think there have beensome significant advances on those two points.Oil & Gas IQ: Thank you, and from a technical perspective, what areas do you feel stillrequire development?B Songhurst: I think really I want to speak up on the one above. Although were makingreally good progress with the hoses, I think the industry really would like to offload LNG froma liquefaction vessel to a shuttle tanker in a tandem mooring arrangement where the shuttletanker is actually behind the vessel in much the same way that oil is transported from a FPSOto an oil tanker where the two vessels are not side by side, but they are some 50 metres, 60metres apart, one behind the other. I think everybody really desires that as a solution.All the current solutions are still really based on side by side, including Shell’s at the moment,and I think if we could develop an aerial hose that would enable tandem offloading of LNG toa shuttle tanker, I really think that will be a major step forward. I think thats a major area, inmy mind.I think the rest of the issues like sloshing in tanks and liquefaction technology, all those otheraspects, honestly I believe they are quite well solved now and most of them are occurring tosome extent on complex FPSOs currently used in the oil industry as well. Many of those areactually producing and exporting liquefied petroleum gas (LPG), it’s just the cryogenic aspectswhich haven’t.There is one other aspect which I think does need to be looked at and it’s talked about a lot,which is the possibility of LNG spills on these vessels, and clearly LNG would seriouslydamage a carbon steel deck of a ship, but there are technologies there that will enable thosespills to be captured and to protect the deck, but maybe that is just one other area that isworthy of a bit more evaluation.Oil & Gas IQ: Thank you Brian, and with health and safety on everybody’s mind, do you feelthat the Health and Safety Executive (HSE) has a big role to play in the development ofFLNG?
B Songhurst: Yes I do. I think the first thing to say about LNG is it has a tremendously goodsafety record; 1944 was the last major incident of an LNG accident in Cleveland in the UnitedStates. Since that time there really has been a superb safety record of the LNG industry.I think clearly HSE has a role to play. We clearly need, at each step of the development, rightfrom the outset, to have HSE plans to make sure that were clear in our understanding ofhealth, safety and environmental issues, and clearly they will have their role to play. So I thinkyes, clearly it will have a role, theres a doubt about that and it needs to be worked out, butthe industry has an excellent safety record. I would first say it’s outstanding and I know theindustry wants to continue with that.I think in terms of comparing it with onshore based liquefaction projects, the issues aredifferent. Here we clearly have motion and we have that safety issue to look at, and we havea much more compact plant, but let’s recognise that major oil Floating Production Storageand Offloading vessels (FPSOs) today are extremely complex, theyre extremely compact,they have lots of piping and systems, theyre handling LPG which in many ways can beregarded as more dangerous than LNG.By nature, the LPGs explode whereas LNG burns, so I think there are different aspects, but Iwould not say floating liquefaction is more dangerous. No, there are different issues that needto be worked and I think the industry is in excellent shape to work them through and isworking them through with these major engineering studies that are going on at the moment.Oil & Gas IQ: Thanks for your views. How close, in your opinion, are we to FLNG movingfrom theory to practice?B Songhurst: A very difficult question. I think, from a technology point of view I would saywere very close, within the next couple of years. I think the real issue at the moment is thelow gas prices and the sheer economics. At the moment I think that floating liquefactioneconomics is more expensive than onshore, although there are pros and cons and there aresituations where floating liquefaction could be a lower-cost solution, but I think it needs amore robust gas price in the industry to actually make or get sanction of the first LNG project,the first floating liquefaction project.I think that is whats standing in the way at the moment of getting the sanction of the firstproject. I think the other issues can generally be worked, but I would like to think... who knowsabout LNG and gas prices? I dont know the answer to that, but I think once prices arestronger and firmer, that will be really the key signal point for a floating liquefaction project toproceed.Oil & Gas IQ: Thanks, Brian, for your insight into this, and in what way do you think thatmeetings like the Global Floating LNG Summit are useful for the FLNG community?B Songhurst: I think the biggest value is networking and exchanging of views. There arequite a lot of issues out there to be worked on. Theyre not in insurmountable by any means,but I do believe it’s by talking together, having summits like this where people can shareviews and share best practices, share understanding, share solutions that theyve developed,recognising of course proprietary information as well. I think there is nothing better thanpeople getting together and working the issues jointly as an industry.Oil & Gas IQ: We hope it will be a useful summit. What areas will you be covering there?B Songhurst: I’ll be running a workshop looking at whats missing for the sanction of the firstfloating liquefaction project and the way many of the points that youve just asked me aboutrelate to that. That will be my own particular activity with the workshop. I will also be giving apaper where Ill be trying to cut through some of the hype, maybe, which has been addressedin floating liquefaction to really just try and address some of the key issues and how we needto break through and get into there.
I think one of the areas that I really want to cover too is that the floating storage andregasification business has become quite mature now. I think there are over eight projectsactually in operation so weve built a lot of confidence through that. Id like to see thatconfidence extended now into floating liquefaction.Oil & Gas IQ: We look forward to hearing more from the event. Thank you very much for yourtime, it’s been great to speak to you.The Global Floating LNG Summit will take place from 20th - 21st January in London. Forfurther information, please visit the website: www.globalflngsummit.co.uk, call the enquiriesteam on 0800 652 2363, or email firstname.lastname@example.org.IQPCPlease note that we do all we can to ensure accuracy within the translation to word of audio interviews but that errors may stillunderstandably occur in some cases. If you believe that a serious inaccuracy has been made within the text, please contact +44(0) 207 368 9425 or email email@example.com.
Register and pay before 17th December 2010 and save up to £200 GLOBAL FLOATING LNG SUMMIT 2011 Unlock offshore gas reserves, monetise stranded fields and bypass expensive infrastructure This year’s expert participants include: Quote Senior Vice President - Operations FLNGSLIDE Excelerate Energy L.P. to receive a 20% discount Manager Concept Development on your FLEX LNG 2-Day Conference: 25th-26th January 2011www.globalflngsummit.com conference Vice President Pre Conference Workshop: 24th January 2011 ticket LNG Marine Operations America Square Conference Centre, London, UK E.ON Ruhrgas Floating Liquid Natural Gas represents a significant and yet untapped revenue stream. The Global FLNG Summit will provide Director operator led, in-depth analysis on how to: Methane Services BG Group • Perfect ship-to-ship transfer with the latest technical developments • Utilise the latest advances in floating re-gas and liquefaction LNG Business Development Manager technology Centrica • Ensure that your FLNG project is safety compliant from its inception with direct guidance from the HSE General Manager Sigtto • Build the business case for FLNG investment with a 360 degree assessment of the financial and legal requirements Head of LNG Energy & Power Ltd “Excellent discussions on the high impact issues.” Emerging Technology Lead Michael Harbeson, Conoco Phillips HSE Plus in depth interactive pre conference workshops FLNG Consultant Workshop A: Workshop B Norwegian Petroleum Society 24th Jan 09:00 – 12:00 24th Jan 13:00 – 16:00 What’s missing for the sanction of the Joint Venture Contracting Senior Research Fellow first Floating Liquefaction Vessel? Energy and Power Ltd Allocating interests and risk between participants The Oxford Institute for Leader to be announced Energy Studies Media Partners: Supported by: Sponsored by: Telephone: Fax: Email: Visit: +44 (0)20 7368 9300 +44 (0)20 7368 9301 firstname.lastname@example.org www.globalflngsummit.com
Workshop Day Monday 24th January 2011Workshop A 09.00 - 12.00 AM What’s missing for the sanction of the first Floating Liquefaction Vessel? The industry has been studying floating liquefaction for the past 40 years and a lot of money has been spent on engineering studies but still no sanctioned project. It has been mentioned that one company alone has spent around $500 million to date on their concept but still no orders. This workshop will summarise the current options on offer and then look at the issues that are likely preventing approval of the first project. Namely; • The need for an economic solution that will generate a profit to stakeholders; • The main technical issues and how they can be mitigated • The main commercial issues and how they can be addressed • The need to comply with the project development ‘gated’ process for smooth energy company buy-in and approval; • The project execution strategy to be adopted, particularly for new technology; • The lessons learned from the recent successful floating storage and regasification projects and how they could be applied to benefit floating liquefaction projects; Your workshop leader: Brian Songhurst, Director LNG, Energy and Power Lunch 12:00 – 13:00Workshop B 13.00 - 16.00 PM Joint Ventures Contracting Joint ventures and partnering are emerging as important tools in developing successful FLNG projects. Success or failure in the development of an FLNG project may ultimately depend on a coherent alignment of interests and the appropriate allocation of risks between participants. We will examine and explore joint venture and partnering issues and challenges in the context of FLNG projects. • Identify and manage legal risks in FLNG joint ventures • Get to grips with key documentation in FLNG joint venture arrangements • Discuss ownership and management of property issues, including IP • Resolve joint venture disputes in the energy sector This interactive workshop will give you an in-depth understanding of the fundamental issues relevant to structuring joint ventures in the context of an FLNG project. Workshop Leader to be Announced About Oil & Gas IQ “The event brought together Become a member of Oil and Gas IQ and receive complimentary resources that will keep you at the forefront of industry change, access all the known players in the to our growing library of multi-media presentations, an email newsletter updating you on new content that has aggregated news feed from over field and really demonstrated 1000 global news sources industry and special member only discounts on events. Become a member at: www.oilandgasiq.com their expertise.” Steve Hamblett, RINA UK LTD Telephone: Fax: Email: Visit: +44 (0)20 7368 9300 +44 (0)20 7368 9301 email@example.com www.globalflngsummit.com
Conference Day One Tuesday 25th January 201108:30 Registration and welcome coffee 12:30 Extracting stranded gas - new approaches • earn what developments have been made in other regions L09:00 Chairman’s opening remarks • ear how cutting edge technology is opening up new opportunities H • stablish what progress still needs to be made to make capitalising E09:15 The outlook for global gas: Setting the context on remaining pockets a reality for FLNG Amrit Bhat • Understand the ‘Supply Glut’; its scale, duration and impact on your business Methane Service Director • Find out how post recession supply and demand fundamentals will effect BG Group* your business • Develop a clear understanding of the World’s future LNG needs 13:15 Lunch and Networking Break • Assess the challenges and opportunities for FLNG and you can deal with them Howard Rogers Senior Research Fellow Technical Focus Sessions Oxford Institute of Energy Studies 14:15 Tandem and side-by-side transfer, evaluate10:00 FLNG Beyond the Hype – Discover the latest the merits of each approach developments in FLNG technology • ow to operate in varying climactic conditions H • View the concepts currently on offer for floating liquefaction • aximise the effectiveness of cryogenic flexible hosing M • Hear where the first FLNG projects are likely to be located • erfect deployment and connection methods P • hat tangible successes have been achieved to date in the development W Captain Mark K. Lane of FLNG? Senior Vice President - Operations • earn from successful FSRU projects and the elements that can be L Excelerate Energy L.P. transferred to planned LNG-FPSOs • stablish the crucial steps that need to be taken to accelerate the first E 15.00 Adoption of new technologies for floating LNG; floating liquefaction project The development of a LNG Test and Technology Brian Songhurst Centre: Director LNG • nderstanding the Technology development needs for floating LNG U Energy and Power production, regasification and small scale supply • mploy testing and modelling within LNG to validate safety and reliability E of new technologies and equipment10:45 Speed Networking Ice Breaker Session • ear what lessons have been learned from testing and qualification of H Short-list your top business partners and form essential contacts. LNG transfer hoses You will have the opportunity to exchange details with every member of the delegate audience- so that you have already identified your Bas van den Beemt business prospects as the Summit gets underway Business developer Oil and Gas TNO Science and Industry 15:45 Coffee and networking break11:15 Coffee and networking break 16:30 Optimise your FLNG powering solution and11:45 Key Legal Issues for Joint Ventures service operation and Partnering in a successful FLNG Project • Ensure an effective synergy between your core product and system • dentify, allocate and manage legal risk in FLNG joint ventures I • Devise a dynamic maintenance plan • evelopment of Technology & Ownership and use of property, including IP D • Explore the latest technology solutions • nderstanding the procurement and construction process U Alexandre Eykerman For speaker updates visit www.globalflngsummit.com Sales Director Ship Power Wärtsilä Switzerland 17:15 Chairman’s summary and close of conference day one * Subject to final confirmation “It was good to hear the opinion of the variouselements of the LNG-FSPOvalue chain” Arata Nakamura, Inpex Corporation Telephone: Fax: Email: Visit: +44 (0)20 7368 9300 +44 (0)20 7368 9301 firstname.lastname@example.org www.globalflngsummit.com
Conference Day Two Wednesday 26th January 201108:30 Registration and welcome coffee 13:45 Problem Solving Session Conversion of existing09:00 Chairman’s opening remarks LNG Ships • conversion a viable alternative to building an FLNG facility from Is scratch?09:15 Ship based regasification - from the regulator’s • out if your existing infrastructure can successfully accommodate Find perspective necessary topside facilities • ind our how LNG imports contribute to UK energy mix F • What potential challenges could conversion create? • ear about the UK regulator’s experience in shore-side regasification H Chris Spilsbury and in LNG imports from ships Engineering Consultant • Establish how the increasing interest in ship-based regasification is BG Group* proving to be a challenging development • dentify how responsible regulators assess the hazards, risks and I necessary responses to enable the safe introduction and expansion 14.30 Unconventional LNG - Changing the shape of this process into the UK of the business • dentify the key success factors for unconventional LNG projects I Taff Powell • hat insights can we learn from CSG LNG for FLNG? W Emerging Technologies Lead • ow much of a role will FLNG play in future Global LNG Business? H HSE Giles Farrer Analyst - Global LNG10:00 Panel Session - FLNG Risk Mitigation Wood Mackenzie • ind out to perform risk assessments associated with using new F technology before its implementation 15:15 Coffee and networking break • Discover the pitfalls of being part of the first wave of operators of FLNG facilities 15:45 Panel Discussion and Open Floor Interactive • Balance the pros and cons so that you can decide if the risk is justifiable Session: Creating the business case for FLNG Taff Powell In roundtables – use the knowledge and opinions gathered over the last Emerging Technologies Lead two days to inform the creation of a business case for FLNG. Each group HSE will need to identify… William Wayne • he possible risks to be mitigated T General Manager • ajor costs to be covered M SIGGTO • he overall financial justification for investment T Nicholas Jones10:45 Coffee and networking break Concept Development Manager FLEX LNG11:15 Chatham House Rules Frederic Venner A closed session where you can discuss those sensitive and burning Vice President LNG Marine Operations issues. This will be an Audio Visual free session in which everything that E.ON* is said is off the record. Questions collected from the networking sessions Captain Mark Lane on day 1 will be put to the group and answered with complete anonymity. Vice President of Operations A perfect opportunity to voice that controversial theory! Excellerate Energy12:00 Problem Solving Session – Financing 16:30 Wrap-up session: Looking forward – • alculate the realistic costs associated with putting an FLNG ship C what’s next for the industry? into operation • Move forward by taking account of history and ascertaining the timelines • hould banks or other investors be approached to raise capital? S that applied to early LNG projects and FPSO projects • ow much risk can be mitigated by spreading financing options? H • s projects begin to ascertain what the next challenge will be as A companies look past the FEED stage Nicholas Jones • e ready to deal with the operation specific risks with practical steps B Concept Development Manager to address them FLEX LNG 17:15 Chairman’s summary and close of main conference12.45 Lunch and networking break * Subject to final confirmation Who should attend • Director of FLNG • Vice President Offshore • Vice-President Gas the Global FLNG • Head of LNG • Naval Architects • Emerging Technologies Lead Summit? • Business Development Manager • Senior Project Manager Telephone: Fax: Email: Visit: +44 (0)20 7368 9300 +44 (0)20 7368 9301 email@example.com www.globalflngsummit.com
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