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Floating CNG: a simpler way to monetize offshore gas David Stenning, P.Eng. Sea NG Corporation John Fitzpatrick, P.Eng. Sea NG Corporation Dr. Mark Trebble, P.Eng. Sea NG Corporation

Copyright 2012, Offshore Technology Conference This paper was prepared for presentation at the Offshore Technology Conference held in Houston, Texas, USA, 30 April–3 May 2012. This paper was selected for presentation by an OTC program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed by the Offshore Technology Conference and are subject to correction by the author(s). The material does not necessarily reflect any position of the Offshore Technology Conference, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Offshore Technology Conference is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of OTC copyright.

Abstract Monetizing offshore gas by compressing and shipping in CNG carriers (FCNG) is simpler and in most cases, less expensive than liquefying and shipping in LNG carriers (FLNG). Seaborne CNG transport requires essentially the same infrastructure as pipeline export, except that the gas is compressed into a ship rather than a pipeline.

Significant investments are being made in engineering and implementing FLNG systems. These FLNG systems are generally aimed at large field developments. FCNG provides a new way to add to the world's natural gas supply by allowing smaller offshore gas fields to be economically exploited.

The key to making FCNG a robust and general solution for offshore gas exploitation is the availability of internationally approved CNG ships that can off-take the gas and deliver it economically to markets within 2500 km. These approved CNG ships are now available.

The paper will describe the major components of an FCNG system including the capital and operating costs. It will also outline the principal advantages of such a system compared to an FLNG system.

Introduction Many offshore gas fields are too small or too remote to produce by pipeline to shore. The LNG industry has advanced to fill the need in respect of larger gas fields by creating an FLNG production concept where an LNG processing and refrigeration plant, complete with LNG storage, is integrated into a ship or barge and moored at a gas field. LNG ships are then used to offtake the LNG and deliver it to markets, where it is stored and regasified as needed. FLNG projects have many technical and economic challenges, and the recent announcement of Shell’s final investment decision for the Prelude FLNG project is a testament to the work and commitment that the industry has invested in FLNG. However, a simpler and less expensive way to produce gas from many fields is to avoid liquefaction altogether and instead just compress the gas into CNG ships, which then deliver it to regional markets. Marine CNG serves markets that fall between subsea pipeline markets and long distance LNG markets.

Virtually all FPSOs in operation today treat and compress natural gas, either to reinject associated gas or to export it by pipeline. Gas FPOs take raw gas onto a floating production platform, where it is processed, compressed and delivered to shore by pipeline. This is the same technology required to produce CNG offshore. The produced liquids (LPGs and condensate) are

Figure 1: Compressed Natural Gas (CNG) Ship

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either conveyed off the FCNG by LPG capable vessels or they can be stored separately on the CNG ships. The key to realizing this opportunity is the availability of approved and cost efficient CNG ships.

The recent ABS approval for construction of Sea NG’s Coselle™ CNG ships now provides industry with the means to safely transport compressed gas by ship. This opens many opportunities to exploit stranded offshore gas fields and to monetize gas that might otherwise be reinjected or flared.

CNG versus LNG

To transport natural gas efficiently, its density must be increased. The principal way to achieve this is by decreasing temperature and/or increasing pressure. Decreasing the temperature to -162 °C causes it to condense to a liquid (LNG) at ambient pressure and results in a volume ratio of 600:1. Compressing the gas to 275 bar at ambient temperature squeezes the gas to a dense gaseous phase with a volume ratio of 300:1 (Sea NG’s Coselle CNG ships operate at 275 bar).

Maximizing density does not necessarily maximize economy. The cost and complexity of the full FLNG chain must be compared to the full FCNG chain. The liquefaction chain includes extensive gas processing, liquefaction, onboard LNG storage, cryogenic transfer, LNG ship transport, regasification, and compression to the receiving pipeline. The CNG chain includes gas processing, compression, onboard CNG storage (optional), high-pressure transfer to a CNG ship, transport, decompression and scavenging compression to the receiving pipeline.

For many projects CNG is a lower cost solution. In the past, no CNG ships were developed or approved and so this more economical CNG solution has been ignored. One reason these ships were not developed was that the technology to achieve and contain volume ratios of 300:1 was not economic. A decade of work on the regulations, engineering and full-scale fatigue testing has paved the way for the first commercial CNG ships. Operators can now choose between export by pipeline, LNG or CNG.

FCNG: a shuttle tanker operation An FCNG production vessel is a traditional gas floating production unit (FPO) with a high-pressure gas transfer system to load Coselle CNG shuttle ships instead of a subsea pipeline. CNG is transferred at near ambient temperatures so the hoses and transfer systems are the same as those used to transfer high-pressure gas and well fluids onto an FPO. The CNG shuttle ships provide both storage and transport, thus avoiding the necessity for storage on board the FCNG vessel. For “upset situations” where a CNG ship is not available, the gas could be reinjected, flared or, as described below, stored in Coselle gas storage containers incorporated into the FCNG itself.

The reliability of shuttle systems has been proven for offshore oil FPOs. For example, the Hiedrun oil FPO in the Norwegian sector of the North Sea has no storage and relies entirely on shuttle tankers to provide both storage and off-take. This system has operated for over 13 years with virtually zero downtime. The major buoy system suppliers have reviewed CNG transfer and found that their systems can be adapted for high-pressure CNG transfer.

It is important to recognize that a CNG delivery system is a continuous flow process without interruption or discontinuity (like a pipeline) and not a batch process like LNG or fuel oils; gas flows continuously with high reliability via the CNG shuttle ships.

FCNG advantages The advantages of CNG ship transport from an FCNG production vessel over a gas pipeline to shore are:

1. CNG ships can reach more distant markets.

2. CNG ships have the flexibility to reach multiple markets. Once laid, pipelines are fixed to a particular market, typically the nearest landfall.

3. Pipelines must be fully written off over the life of the project to which they are attached, whereas CNG carriers can be moved to new fields, extending their operational life to 30 years or more.

Figure 2: FPSO transferring CNG to a Coselle CNG ship

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4. Deepwater or submarine hazards (e.g. seismic) can make pipelines extremely expensive or technically impossible, whereas CNG ships are unaffected.

The main advantages of pipelines are their minimal associated operating costs. For near-shore applications they will remain the most cost-effective solution. FCNG is a viable alternative that has its economic niche in deeper water and where longer distances are involved, just as with FLNG.

The principal advantages of FCNG over FLNG are:

1. It is much simpler and less expensive to prepare raw gas for compression than for liquefaction. The two main concerns with processing raw gas for compression are the formation of acids that would corrode the containment system or hydrates that would block the flow. Once the potential for free water is eliminated by dehydration, acid-forming gases are prevented and dehydration to the appropriate dew point prevents hydrate formation.

2. Since the gas is not liquefied, the only issues with inert gases relate to the customers’ requirements for heating value. CNG systems are also more tolerant to the presence of nitrogen, CO2 and mercury. LNG preprocessing requires almost complete removal of CO2 components in order to avoid CO2 freezing which is a substantial incremental cost over CNG gas preprocessing. LNG preprocessing also requires molecular sieve water dehydration, while CNG preprocessing, in some instances, can be adequately managed with cheaper technology such as TEG systems.

3. Hydrocarbon liquids removal may be required by both CNG and LNG systems in order to maintain acceptable hydrocarbon dew-points in the supplied gas. LNG systems also have to remove heavier hydrocarbons in order to avoid wax formation. CNG is more tolerant to keeping the heavier hydrocarbons in the process stream because the process temperatures are higher. CNG ships can be modified to carry both CNG and LPGs in separate storage containers.

4. From a mechanical and operations perspective, FCNG has the following advantages over FLNG:

a. Risk is reduced. FCNG does not need to carry large inventories of natural gas onboard, since the shuttle ships provide both storage and transportation. Small amounts of storage could be designed into an FCNG vessel to allow gas transfer from a single transfer line. This lower inventory of natural gas stored on the FCNG vessel, plus the fact that de-pressured CNG is lighter than air and will vent to atmosphere, significantly reduces the consequences of an accidental release of gas from the storage or process systems.

b. Sloshing in cargo tanks is not a design issue because CNG is a gas.

c. Transfer systems are simpler. Offloading can be achieved through traditional tandem or buoy loading systems using high-pressure hoses, which are commonly used for risers and for reinjection of gas. As this is a new application of existing technology, the development of new hose designs or transfer systems is not required.

d. Offloading can be carried out in open sea conditions; the limiting sea state depends on the transfer system design, but is less constrained than are cryogenic LNG loading arms.

e. An FCNG process is much easier to shut down and start up, thereby increasing safety and operational reliability.

5. From the perspective of energy efficiency, a CNG process consumes less than 5% of the gas compared to an LNG process, which consumes about 10% of the gas.

Because of the 2:1 density difference between LNG and CNG, the economic distance to market for CNG may be limited to approximately 2500 km before the cost of shipping begins to override the economic advantages of offshore compression versus offshore liquefaction. As a result of these economic and operational advantages, CNG is attracting significant industry attention and several energy companies are currently investigating the use of marine CNG for specific projects.

The Coselle CNG container

Cylindrical (bottle type) pressure vessels have been used to store CNG in motor vehicles for over 40 years and today there are over 13 million motor vehicles fuelled by natural gas. While CNG cylinders are very suitable to use as storage for vehicle fuel they are less suited to a large scale CNG ship application. The main difference between marine CNG transport and on-land CNG transport is that the volume of CNG stored is thousands of times larger in marine applications. This makes the use of CNG pressure bottles problematic. To store these large volumes the CNG bottles must be as large as possible. This means making them larger in both diameter and length. In typical bottle-ship designs the CNG bottles are about 1 meter in diameter and 20 meters tall. The typical bottle-ship arrangement is for the bottles to stand vertically in the ship rather than horizontally, primarily because the ship will flex in seas. If the bottles are horizontal this flexing has to be accounted for in the bottle design

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and its support structure, which significantly increases cost. Even vertical bottle systems have basic characteristics that make them high cost solutions:

1. The steel used to form the pressure cylinders is very high quality thick plate which is an expensive product (typically 20% to 40% more expensive than hot rolled coil used to make small diameter line-pipe).

2. Only a few pipe mills can produce the high quality pipe that is required for large diameter pressure vessels. Typically a DSAW (double submerged arc welded) pipe is used. These pipes are much more expensive than the more readily produced high frequency electrical resistance welded (HF-ERW) pipe.

3. Each bottle requires two heads which are then welded on the cylinders and each head has fittings to allow for the gas loading and unloading.

4. Each bottle must have an outlet and an inlet and a means of inspection as well as a pressure relief system, a flow control system and a drain. Because of the great number of pressure cylinders inside the ship, the piping network is extensive and expensive.

Despite these issues, early attempts to create a commercial CNG ship using pressure bottles as the containment system were made. Starting with a bottle-ship, Enron investigated and engineered several potential solutions for ship based CNG containment systems in the late 1990s. The main conclusions were that a ship-based CNG pressure vessel had to be very large, intrinsically safe, and less expensive than current bottle designs. One of the central thoughts was to fit a pipeline on a ship. It was through work on this idea that the Coselle was developed.

A Coselle is a coiled pipeline made from relatively inexpensive small diameter (ERW) pipe. By coiling pipe it is possible to create a very large pressure vessel that can fit compactly into a ship. Figure 3 compares an equivalent volume of bottles (169) and Coselles (6). The simplicity and efficiency of the Coselle system is apparent. Each Coselle is a 21 km pipeline made of 170 mm HF-ERW pipe. Where 169 bottles require over 300 connections, the six Coselles have just six.

High-pressure gas must be contained safely. One significant safety advantage of the Coselle is that the diameter of the gas storage pipe is small. In the highly unlikely event of a full bore rupture the energy released is insufficient to damage the ship`s hull.

Coiled pipe is not new. It has been used for decades as a means of laying offshore pipe.

The Coselle has been fully engineered, tested and approved for marine use. The Coselle prototype testing exceeded all of the requirements of Class. For example, it was tested in fatigue for over three times the classification requirement. Even with 65,000 full pressure cycles (equivalent to 1250 years of operation) the Coselle did not fail nor did it show any evidence of potential fatigue failure in post-test analyses. The Coselle is a safe, reliable and inexpensive CNG container.

Coselle CNG ships

A CNG carrier is a shuttle ship and needs to be efficiently designed taking into account the Coselle and associated cargo systems. Sea NG’s Coselle CNG ship is a model of efficiency. The Coselles are integrated into the ship structure and thereby make maximum use of the Coselle’s structural steel in the ship structure. This arrangement saves 30% of the structural steel that would be required for a similar ship without integrated Coselles.

The recent approval by the American Bureau of Shipping (ABS) of the Coselle CNG ship is the result of a decade of engineering, design and

Figure 3: Pressure cylinders versus Coselles

Figure 4: CNG Coselle ship sizes

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testing. Specifically, ABS has fully approved the design of a Coselle CNG ship, inclusive of the Coselle CNG container and its integration into the ship. All testing and safety analyses have now been completed and demonstrate that this ship with the Coselle CNG containment system is at least as safe as any other gas carrier.

Industry now has an approved CNG carrier that allows a simpler and less expensive way to ship natural gas by sea.

To match the requirements of a broad range of projects CNG ships are designed in different sizes. The range of current ship sizes and their principal particulars are set out in Figure 4. A schematic of a C25 ship is shown in Figure 5.

The speed of these ships depends on the requirements of a particular project but in general the speed ranges from 13 to 16 knots. The engines are fuelled with 99% natural gas and 1% diesel fuel.

Figure 5: Coselle CNG ship with 25 Coselles (C25)

The CNG gas process

To assist in understanding the process of how raw gas is processed and delivered via CNG ships an example is provided below for an offshore field with a natural gas production capability of 350 mmscf/d. The gas is lean gas with a molecular weight of 18.2, a methane content of 88.5%, and a lower heating value of 955 Btu/SCF. The number of ships required to continuously produce and deliver gas at this rate depends on the distance travelled between supply and receiving facilities.

A scenario is described below in which three C84 CNG ships (each containing 84 Coselles in 12 stacks of 7) is used to deliver gas continuously from an FCNG vessel that is 350 km away from a receiving terminal. It is assumed in this example that both the loading and discharging of gas is continuous. The CNG system essentially provides a floating pipeline. It is possible to extend the reach of this “pipeline” by adding ships (see Tables 2 and 3 below). The gas loading and unloading principles described here are independent of shipping distance except that the ships will consume more of the gas as fuel as the distance is extended. The impact of extending the voyage distance is described in the subsequent economics section.

Figure 6: Process flow diagram for 350 mmscf/d CNG example project

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For this example scenario, the gas process flow diagram for loading and discharging the CNG ships is shown in Figure 6 and is described below.

Gas is received on board the FCNG vessel at a pressure of 800 psig and a temperature of 50 F. In many cases the inlet gas pressure will be higher than 800 psig and will require less compression horsepower than indicated here. The gas is dehydrated on the FCNG to a water dewpoint of -15 F using either TEG or molecular sieves. The dewpoint requirement results from the fact that upon depressurization, the gas can reach temperatures of -8 F at the beginning of the unloading sequence. Fuel gas is taken from the dehydrated gas in order to power the compression equipment on board the FCNG at a rate of 6.3 mmscf/d. This leaves a flowrate of 343.7 mmscf/d which is used on a continuous basis to either directly fill a CNG ship or to top up storage Coselles on the FCNG vessel. The rationale for including storage Coselles on the FCNG is based on the requirement to continuously take 350 mmscf/d from the producing wells without interruption, with only one gas transfer system to the CNG shuttle ships. If two transfer systems are used then the storage on the FCNG vessel could be eliminated.

Dehydrated gas is compressed from inlet pressure to 2050 psig in the first stage of compression (K-101) and is then cooled to 90 F using sea water coolers (E-100). This gas is then mixed with gas from storage and fills the incoming ship’s Coselles up to a pressure of 2000 psig after which time the second stage compression is started (K-102) and this raises the gas pressure up to 4040 psig. The connected shuttle ship’s Coselles are filled to a pressure of 4000 psig before disconnecting and travelling to the receiving facility.

The complete cycle for a ship is described as follows:

1. The ship arrives at the FCNG with an average cargo pressure of 231 psig and an average temperature of 12 F. The ship moors and is connected to the FCNG.

2. Gas from the FCNG storage (initially at 4000 psig) flows at a rate of 550 mmscf/d and is combined with gas from the first stage compressor for a combined loading rate of 893.7 mmscf/d. This gas fills the Coselle CNG ship up to a pressure of 2000 psig which takes 5.3 hours. This requires 121.5 mmscf of gas to be taken out of storage.

3. Gas from the FCNG storage is then stopped and the second stage compressor (K-102) is started. The remainder of the Coselle CNG ship is filled at a rate of 343.7 mmscf/d which requires 9.7 hours. The total filling time for the ship is 15.0 hours and the average temperature of the gas at the end of loading is 96.2 F at a pressure of 4000 psig. The C84 vessel consumes 3.7 mmscf for ship fuel during the round trip voyage and delivers 333 mmscf of gas to the receiving facility.

4. As soon as the ship is no longer taking gas, the high pressure discharge gas from K-102 is directed back into the FCNG storage to make up the gas that was used during dual loading.

5. The ship disconnects from the FCNG lines and prepares to depart. The time for mooring, connecting, and disconnecting is 6 hours per cycle.

6. The ship sails to the receiving facility at a speed of 16 knots which takes 12 hours.

7. The ship either moors at a buoy or docks at a jetty at the receiving facility alongside the previous ship which is nearly empty. The receiving terminal is configured so that two vessels can be connected via separate loading arms at a jetty or at separate buoys so that there is no interruption of gas discharge. An alternative method of maintaining continuous discharge would be to provide buffer storage at the receiving terminal, in which case only one buoy or loading arm would be required. The initial pressure of the cargo arriving at the receiving facility is 100 psig lower than when it left the supply facility due to consumption of fuel by the ship during the journey and temperature drop in the Coselle.

8. The ship begins discharging gas through the high pressure (HP) discharge line at a rate of 273.3 mmscf/d while the previous ship empties the last stack of Coselles through the low pressure (LP) header down to the ship heel pressure of 250 psig at a rate of 66.7 mmscf/d. This overlap period lasts for just over 2 hours. The gas rate through the HP header (273.3 mmscf/d) is such that it requires roughly 2 hours to discharge a Coselle stack from the initial pressure (3902 psig) down to 820 psig and it takes an additional 2 hours to reduce that stack to the heel pressure (250 psig) at the LP header flow rate of 66.7 mmscf/d.

9. Once the ship’s first stack is depressurized to 820 psig through the HP header, the first stack is switched over to the LP header where it finishes discharging to 250 psig. The second stack of Coselles is connected to the HP header and begins to discharge at the same time. The use of high and low pressure headers results in significantly lower compression requirements.

10. The ship is subsequently unloaded in a cascade fashion stack by stack until the last stack is switched to the LP header. Gas for the HP header is then supplied from the next ship which has arrived and connected. The ships overlap for 2 hours at the discharge terminal.

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11. The ship then sails back to the supply facility using some of the remaining gas as fuel in the journey so it arrives back at an average pressure of 231.4 psig to begin the cycle anew. The reduction in pressure from 250 psig is once again due to fuel consumption on the return trip.

12. Fuel for the scavenger compressor (K-201) is taken from the ship discharge at a rate of 1.0 mmscf/d leaving a continuous supply to the receiving facility of 339 mmscf/d.

The total fuel consumption is 6.3 mmscf/d for the supply facility, 3.7 mmscf/d for ship fuel, and 1.0 mmscf/d for the scavenging compressor for a total of 11 mmscf/d. That represents just 3.2% of the FPSO production rate of 350 mmscf/d.

The total cycle time is 70.5 hrs made up of: 15 hours loading, 12 hours travel to the receiving terminal, 3 hours mooring and connecting, 25.5 hours discharge, 12 hours travel returning to the FCNG vessel and 3 hours mooring and connecting.

With three ships a supply rate of 339 mmscf/d to the receiving facility can be achieved.

Gas processing system

The gas processing requirements on the topsides are dependent on the composition of the gas entering the facility. A typical facility will include gas/liquid separation, gas dehydration, gas compression and liquids processing. A typical block diagram is shown in Figure 7.

The extent of liquids processing required is dependent on the composition and storage requirements. The processing can vary from simple flash stabilization to a full stabilization column.

The separated gas is typically dehydrated in a glycol dehydration column to a water dew point sufficient to prevent water drop out and hydrate formation when the compressed gas is let down to the required pressure for delivery. A standard triethylene glycol (TEG) dehydration unit can normally achieve the necessary dew point.

A two stage compressor is required to boost the gas to the required pressure for storage on the FPO and/or storage on the CNG shuttle tanker.

Stabilized condensate could be stored on board the FCNG vessel and transferred intermittently to LPG ships or alternatively the Coselle CNG ships could be equipped to handle LPGs.

Figure 7: Typical block diagram for a Floating CNG production vessel

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FCNG components and capital cost Every project will have its own set of criteria that will affect its specific economics. However, it is instructive to model a typical FCNG project and estimate the costs and associated tariffs. The following assumptions are made for this example:

1. Production rate is 350 mmscf/d (2.5 million tpy).

2. Storage is included on the FCNG.

3. The FCNG is a new build based on a Coselle CNG ship with mooring and topsides added.

4. The fleet consists of Coselle CNG ships, each with 84 Coselles. The number of ships required depends on the distance to market.

5. A turret mooring system is used to moor the FCNG vessel (US$ 75 million).

6. A tandem offloading system is used to transfer the CNG to the CNG ship (US$ 15 million).

The costs estimates used in this economic assessment are as follows:

1. The building cost and schedule for several sizes of Coselle CNG ships have been evaluated by large Korean shipyards. The current cost estimate for a complete C84 ship is US$ 210 million including Coselles, cargo manifold, bow connection and gas transfer system, dynamic positioning, and owner’s costs.

2. The FCNG ship is based on the 84-Coselle ship with sufficient Coselles to provide the required buffer storage. The cost estimate for the hull, machinery and storage is US$ 150 million. The mooring systems add US$ 90 million for a total cost of US$ 240 million.

3. About 48,000 HP of installed compression power is required (assuming an 800 psig suction and a 33% sparing). Compression is priced at US$ 3500 per HP for a total installed compression cost of US$ 170 million.

4. Processing costs depend on gas composition, but US$ 200 million is assumed for this example and would be sufficient for most sweet gas compositions. (The Coselle ships are not approved for sour gas service.)

5. No field development or subsea system costs or production risers and control systems are included in this cost assessment.

6. No costs have been assumed for decompression at the onshore receiving facility. However CNG receiving facilities are significantly simpler and less costly than LNG receiving facilities.

7. To convert capital cost into an annual cost, it is assumed that 12% of the capital is recovered each operating year.

These assumptions produce the capital and operating cost estimates presented in the following table. Table 1

To judge the robustness of the cost estimate for the FCNG vessel it can be compared to the cost of a recent gas FPO contract awarded to BW Offshore Limited by Kangean Energy Indonesia. The announced total value of the 10-year charter contract was US$ 875 million and included design, construction, delivery, installation and operation of a 340 mmscf/d gas FPO (export to subsea pipeline), complete with mooring systems and risers. If that number is simply divided by 10 (the term of the charter) the annual charter cost is US$ 87.5 million. This compares closely with the estimated annual charter cost presented in Table 1 of US$ 87.3 million per year for an FCNG vessel. The Kangean Energy gas FPO included risers and production control systems which are not included in the FCNG vessel estimates.

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To compare an FCNG cost to an FLNG cost, it is useful to use the common metric of capital cost per tonne of gas produced each year (US$ per tpy). A commonly published cost for an FLNG vessel, including the base vessel with LNG storage plus processing, liquefaction and transfer systems – but not including transportation – is US$ 1000 per tpy. For comparison, an FCNG vessel has a capital cost of US$ 244 per tpy. Table 2 expresses the capital cost of the example FCNG system with the same metric, including the ships needed to deliver gas to markets up to 1400 km away. This demonstrates the competitiveness of FCNG on a capital cost basis.

Table 2

For simplicity in the comparison, no costs have been assumed for onshore regasification/compression of LNG or scavenging compression of CNG at the receiving facility. Since a CNG discharge buoy and short pipeline to shore can be used in place of an LNG berth and LNG storage, the CNG receiving facility will prove more cost competitive, especially from an infrastructure cost perspective. This also reduces environmental impact and facilitates approvals with local authorities.

It is also useful to examine the costs from a tariff perspective, as shown in Table 3. The tariffs are calculated by dividing the daily opex plus capex charge provided in Table 1 by the daily volume of gas delivered. The delivered gas is the produced gas (350 mmscf/d) less the total amount of gas consumed in the delivery system including; processing, compression and ship fuel (shrinkage).

Table 3

Scalability

One of the main advantages of FCNG is that it is easily scalable to smaller volumes than LNG. In the above example, if the volume was reduced to 200 mmscf/d then the ship size would be reduced from a C84 to a C49. The C84 carries 350 mmscf of gas and costs $US 210 million ($US 0.60/scf) whereas a C49 ships carries 200 mmscf and costs $US 136 million ($US 0.68 per scf). From the shipping perspective a 43% drop in volume results in a 13% increase in overall tariff.

It is also possible to reduce the number of ships should the volume fall. For example, if the rate was 200 mmscf/d then three C84 ships could reach markets at distances of up to 700 km, and four C84 ships could reach markets up to 1400 km away.

Conclusion FCNG serves markets that fall between subsea pipeline markets and very long distance LNG markets. For market opportunities that cannot be reached by a subsea pipeline but are within 2500 km, FCNG provides a simpler and less expensive process than FLNG, with more flexibility to deliver to multiple sites.