Cost case on FLNG not so clear cut

[Gator]

Browse cost case on FLNG not so clear cut

2013-10-21 18:16:10.804 GMT

The Western Australian (WA) Government estimates that the return on

investment from the Browse LNG project will be between 12.5 and 13 per cent.

Floating LNG (FLNG) technology will be used to exploit the Browse gas fields

off the northern coast of WA. Fran Logan, deputy chairman of the WA

Government's economic and industry standing committee inquiry into FLNG,

appeared before a hearing in Perth on 21 October 2013. He said that the

abandoned option of building an onshore LNG plant at James Price Point, north

of Broome, would have generated an 11.5 per cent return on investment;

Browse LNG partners eye 13pc return

2013-10-21 16:48:04.261 GMT

Staff of BP, one of the joint venturers with Woodside Petroleum in the Browse

gas development offshore Western Australia (WA), on 21 October 2013 appeared

before a state parliamentary inquiry. It heard that the move to floating LNG

technology for the fields, instead of the WA Government-favoured onshore

processing hub at James Price Point, will bring a return on investment of up

to 13% as compared to just 11.5%. The Government has won an ally on the issue

in the Australian Manufacturing Workers Union, which claims the floating LNG

solution will mean 7,000 fewer jobs for WA;

[admin]

Mildly surprising, thanks for that, Gator

[ArtM72]

So much of that economic analysis depends upon the functional life of the asset and its gas supply. I suspect if the gas supply is limited the floating platform will realize an ultimate ROI better as the plant can be substantially redeployed in the future after the gas runs out with significant residual value. If on the other hand the gas supply can last for additional decades beyond the project's amortized life then the floater will not have that advantage. My guess? FWIW (nothing), find commercial gas at Wahoo and a land built plant (stick built or modular) would be the way to go.

[sydbod]

ArtM72, I believe ( in an article put out by Woodside,) the idea with their FLNG plans is to have 3 FLNG plants in action in total. These are to be commissioned one after the other so that income and therefor financing from that income can happen much earlier, as each FLNG plant comes on line, than a large stick build plant.

[ArtM72]

ArtM72, I believe ( in an article put out by Woodside,) the idea with their FLNG plans is to have 3 FLNG plants in action in total. These are to be commissioned one after the other so that income and therefor financing from that income can happen much earlier, as each FLNG plant comes on line, than a large stick build plant.

There would be too much irony if we ended up 5 years from now with land based modular and FLNG operating just outside Kerema.