Floating Liquefied Natural Gas (FLNG) Market 2015-2025 - SAMPLE

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Floating Liquefied Natural Gas (FLNG) Market 2015-2025: CAPEX Prospects for LNG FPSOs & FSRUs in a Lower Oil Price Climate

5.5.6 African FLNG Projects

Main

Sponsor(s) Constructor MMTPA

Earliest

Op. Location Vessel Name Est. Cost

Golar SHI 2.0 2015 Ghana Golar Tundra 100

Excelerate TBA 3.8 Q4 2016 Ghana, Aboadze - 500

Gasol (Socar) Lease sought 1.5 2016 Benin, Cotonou

Harbour

- -

Main Sponsor(s) Construct

or MMTPA Status Earliest Op. Location

Est.

Cost

Ophir Energy Plc,

Excelerate

TBD 3 FID 2016 2019 Equatorial

Guinea

2.5

Golar (with SNH, EDF,

Perenco Cameroon

Keppel 1.2 Under

construction

Q1 2017 Cameroon,

Kribi

.735

ENI Partners - 2.5 FID 2015-2016,

FEED by Daewoo

2020 Mozambique 2

Ophir Energy Plc/BG

Group

TBD 2.5 Concept 2020 Tanzania 2.5

Shell TBD TBD Concept TBD Tanzania TBD

Table 5.12 Planned African LNG FPSO Projects (Sponsor, Constructor, MMTPA,

Status, Earliest Operation, Location, Estimated Cost ($bn))

Table 5.11 Planned African FSRU Projects (Owner (Main Sponsor), MMTPA, Earliest

Operation, Location, Vessel Name, Estimated Cost ($m))

Source: Visiongain 2015


25

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The US demand market for natural gas has been substantially and substantively altered by the

shale gas revolution. The need for imported natural gas is now non-existent at the national level,

and 2014 will mark the first year the country will be a net exporter of natural gas. The now unused

onshore import terminals, meanwhile, are almost universally the subject of export application

proposals to the US Department of Energy (DOE)– to convert the import terminals into export

terminals. Applications to export to countries the US has a Free Trade Agreement (FTA) with have

historically been quicker than those destined to places without and FTA. Visiongain expects the US

will move away from isolationist policies regarding energy export, as there is a concerted effort by

the Unconventional Energy and US National Security Task Force to support energy exports to non-

FTA regions. While onshore LNG facilities will surely be employed, visiongain predicts that

exporting US LNG will largely rely on non-conventional floating liquefaction vessels (see below for

a distinction between conventional liquefaction vessels). As such, floating liquefaction vessels will

form the basis of spending for the entire North American region for the forecast period.

5.11.1.2.1 US LNG FPSO Project Analysis

Two 4 mmtpa trademarked FLSO (Floating Liquefaction Storage and Offloading) vessels are

proposed by Excelerate Energy for the Port of Port Lavaca, a town around one hundred miles

south of Houston, Texas. The project has received export approval for countries with which the US

has a FTA, and will be operational by 2019. The Port of Port Lavaca FLNG facilities are

spearheaded by Excelerate Liquefaction Solutions, a subsidiary of Excelerate Energy, who has

extensive experience in the FLNG market with FSRUs. The relatively low CAPEX of $4bn (total) is

achieved by using pre-processed natural gas from the US grid and the pre-existing LNG import

terminal infrastructure at Lavaca Bay. It is not, strictly speaking, an LNG FPSO, as it does not

produce liquefied natural gas from an offshore field.

Another project boasting two floating liquefaction vessels with 4 mmtpa has recently applied to the

DOE for export approval. This project, is sponsored by the Delfin LNG, a joint venture company by

Fairwood Group and Peninsula Group. It has recently been approved to export US LNG to areas

with a FTA, and will be located 30 miles offshore Louisiana, costing around $2bn total. As of

February 2015 Delfin announced publically a non-binding Joint Development Agreement with

Hoegh LNG to construct their liquefaction vessels. This is not anticipated to actually take place.

This project, like many other onshore ones, is late to the development stage and is unlikely to

actually materialize given the advanced stage of other US LNG projects that will beat them to

market. The finances of this operation, in the wake of the oil crisis, are also weak.

Several similar but less certain projects have been submitted to the DOE for approval, though

exact details and the outcomes of their export license applications are, at time of publication,

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7. Expert Opinion

7.1 Matthew Blycha, HFW LLP Interview

Mr. Blycha is a Lawyer who attended the University of Newcastle, Australia. He took a secondment

at Woodside Energy, and is now a partner at Holman Fenwick Willan, a global law firm that

specializes in marine and shipping law. Its headquarters is in London, and Mr. Blycha is based in

Western Australia. He works on regulation and legislation that relate to the LNG and FLNG industry

in Australia, and has spoken publically on the topic at conferences internationally.

7.1.1 About HFW LLP

Visiongain: Thank you Matthew for speaking with me today. Can you give me an introduction to the services HFW LLP provide, particularly in relation to the FLNG industry?

HFW LLP: HFW is an international law firm with fourteen offices around the globe. We work on all

legal aspects involved in LNG and FLNG. In Australia in particular, we’ve done a lot of work on the

regulatory side. That is, how a FLNG unit will be treated under various pieces of legislation.

Generally legislation is not drafted with FLNG units in mind, so the question of how FLNG units will

be treated under various pre-existing legislation needs to be considered by operators and

contractors. I am involved in the construction and development side of FLNG project - how you

would structure the ownership of an FLNG unit, and dealing with all issues through to the design,

construction and operation of FLNG.

Visiongain: Do you mostly advise in Australia, or are you engaged in some of the projects such as those headed to Columbia or developing in south east Asia?

HFW LLP: We advise on projects globally and work on projects across offices. Our London office

has been recently been involved in a project that’s based in the gulf of Mexico, and another in

Africa. Lawyers in other offices, including me, have been involved as needed. Saying that, many

of the projects our Australian offices have been involved in have focused on local projects offshore

of Australia, where many FLNG projects are planned to occur.

7.1.2 Impact of Oil and LNG Price Fall

Visiongain: Planned to occur is exactly what I’d like to ask you about- it’s been quite a tumultuous year for the oil industry and LNG industry. What do you think the impacts of the

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8.1.3 Höegh LNG

FSRU CAPEX, $m (new orders 2015)

$216.67m (Order Value Divided Over Duration of EPC)

Global FSRU CAPEX Share % (2015)

9.7%

Total Revenue (2013) $178m

Headquarters Höegh LNG, Drammensveien 134 0277 Oslo, Norway

Ticker HLNG:OL

IR Contact Arild Jæger,

[email protected]

Website http://www.hoeghlng.com

Höegh LNG is part of Höegh LNG Holding Ltd, and originates with the common holding company,

Leif Höegh & Co. It is listed on the Oslo Stock Exchange. The company has been involved in the

LNG business for over 40 years and currently operates four FSRUs and five LNG carriers. Ship

management is handled at their office in Norway. The company is also invested in FEED studies

for LNG FPSOs with partners such as DSME and KBR. It refers to its FSRUs as Shuttle and

Regasification Vessels (SRVs).

8.1.3.1 Höegh Products and Services

Product/Service Notes LNG Transportation Services Currently have two LNG carriers in operation.

Floating Regasification Currently owns four regasification vessels.

Floating LNG Production Actively involved in five LNG FPSO projects.


Table 8.12 Höegh LNG Overview (FSRU CAPEX, $m (new orders 2015), Global FSRU CAPEX Share % (2015), Total Revenue (2013), Headquarters, Ticker, IR Contact, Website)


Table 8.13 Höegh Products and Services (Product/Service, Notes)

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