Sevan 'Feeding' on FLNG Work with ExxonMobil
Tuesday 28 March 2017
Sevan Marine is understood to have landed front-end engineering and design work with ExxonMobil that could see the first application of its cylindrical concept for floating gas liquefaction on a field being developed by the US behemoth.
The putative deal, disclosed by an industry source, follows a framework pact agreed earlier this year between the Norwegian floater technology player and the supermajor for use of Sevan’s cylindrical hull design for floating liquefied natural gas solutions.
Sevan had expected the first call-off under the agreement to be made by ExxonMobil at the end of February for “continuation of engineering and FLNG design work”, but so far there has been no official word of it from the company.
However, the source said Sevan has now secured the FEED for a firm FLNG project being lined up by ExxonMobil, having previously carried out a feasibility study on such a solution under a collaboration between the pair since 2015.
The apparent award could serve as a precursor for Sevan to provide its hull technology and marine services under a licensing deal, while topsides fabrication would be carried out by a separate contractor under an engineering, procurement and construction contract, with the FLNG unit likely to be owned by ExxonMobil, according to the source.
While the name of the liquefaction project remains a matter for speculation, the source said a possible candidate could be the Scarborough gas field off Western Australia where operator ExxonMobil is considering a standalone FLNG solution or tie-in to an existing LNG facility, having earlier shelved the scheme due to high costs and a market downturn.
The Scarborough facility could also serve as a hub for other stranded gas reserves in the area, according to project partner BHP Billiton.
ExxonMobil, BHP and new partner Woodside Petroleum earlier this year confirmed they were looking to enter the FEED phase on Scarborough next year, with a final investment decision scheduled for 2020.
Exploitation of the 10 trillion cubic feet of dry gas resources at Scarborough, along with the Thebe and Jupiter satellite fields, would require a massive ship-shaped FLNG unit - even larger than that being built by Shell for Prelude - estimated by the source to cost between $7 billion and $8 billion.
Earlier pre-FEED work carried out by Chiyoda and Saipem on Scarborough focused on a ship-shaped FLNG unit with capacity to produce 7 million tonnes per annum of LNG, compared with 5.3 million tpa for Prelude that is due for start-up in the Browse basin off Western Australia next year.
However, the source said expenditure could be cut with a Sevan-designed cylindrical unit that could be built with a “huge difference” in cost as it would not require an expensive turret-and-swivel needed on a ship-shaped unit for station-keeping.
The use of a Sevan unit could also enable the field to be developed in several phases by tying in additional discoveries at a later date, thereby reducing costs on the initial phase and spreading capital expenditure on the project over a longer period, the source claimed.
The geo-stationary Sevan hull would also be more stable in an area exposed to cyclone conditions, avoiding the pitch-and-roll motions of a ship-shaped unit in rough seas, and thus maximising uptime, according to the source.
“This represents a very significant deal for Sevan that is a sign of growing interest from oil and gas companies in its technology, both for FLNG and other field development solutions,” the source said.
“The fact it has been awarded by the world’s biggest supermajor drives this relatively new technology forward and will send a signal to other players who may now also consider this cylindrical concept for other projects.
“ExxonMobil is known as an extremely demanding client that is highly regarded by its competitors, so this move away from ship-shaped technology will make the wider industry sit up and take notice.”
Sevan has earlier carried out a study with a South Korean yard for construction of the cylindrical FLNG concept and has previously stated it had around 20 potential projects on its radar screen for deployment of the innovative unit.