Japanese firms compete for first floating LNG plant

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Several Japanese companies are competing for what would be the first order obtained by a domestic firm to construct a floating facility for liquefying natural gas (LNG).

Malaysia's state-run oil giant, Petroliam Nasional Bhd, or Petronas, plans to set up a plant capable of producing 1.5 million tonnes of liquefied natural gas off the shore of the state of Sabah.

Slated to go onstream in 2016, the overall cost of the gas development project is estimated at 200 billion yen (USD2.5 billion). The Malaysian company recently selected candidates to draw up the plant's basic design.

JGC Corp is teaming up with South Korea's Samsung Heavy Industries, while Modec has joined forces with IHI and Toyo Engineering. After reviewing plans submitted by each camp, Petronas is expected to award the order to one of the groups sometime next year.

No Japanese firm has ever constructed such a facility. JGC has been vying to build one off the coast of Brazil, but that project has stalled.

In the past, natural gas extracted from offshore fields was piped to facilities on land for liquefaction. But a floating plant renders pipelines unnecessary, as gas is liquefied in large vessels directly above the deposit. The factory can also be relocated if the resources become depleted.

These floating plants are expected to lead to the development of small and midsize fields that produce 1-2 million tonnes of LNG a year, projects that used to be unprofitable.

According to estimates, there are more than 2,000 small and midsize offshore gas fields in Southeast Asia, Australia and elsewhere that could be developed using floating liquefaction plants.

Japanese companies, which receive about 60 per cent of all orders placed for land-based LNG plants, hope to take the lead in the market for floating facilities also.

Source: (The Nikkei)

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