China studies floating gas plants for South China Sea

Wed Jul 16, 2014 5:00pm EDT
 
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* CNOOC in pre-feasibility study of FLNG technology

* Facility size discussed at 2.4 mln tpy, 1,500-metre water depth

* FLNG a good option to tap remote gas in South China Sea

* Government supports R&D on advanced offshore engineering

By Chen Aizhu

BEIJING, July 17 (Reuters) - Chinese energy giant CNOOC Group is studying the possibility of building a multi-billion-dollar floating liquefied natural gas (FLNG) vessel, as-yet untried technology that would likely be used to produce gas from the deep waters of the South China Sea.

While the state-run company has made no public announcement, a pre-feasibility study was well under way, CNOOC and other industry officials said. CNOOC was already talking to global engineering firms about possible joint design of the vessel, two industry officials added.

FLNG ships are ocean-based liquefaction plants that can be positioned above reserves to chill extracted gas and load it into LNG tankers for delivery. That could make fields too remote or too small to develop using undersea pipelines viable for production.

About 10 FLNG facilities are being planned globally with a handful under construction, among them the biggest, Prelude, owned by Royal Dutch Shell and due to be producing from an offshore Australian field by 2017. Shell has shied away from offering estimates of Prelude's likely cost, but analysts say it could be more than $12 billion.   Continued...