Partners shake on PNG floating LNG

Offshore staff

TORTOLA, British Virgin Island -- FLEX LNG has agreed terms with InterOil, Pacific LNG, LNGL, and Samsung Heavy Industries (SHI) for a floating LNG (FLNG) project offshore Papua New Guinea.

The facility will liquefy natural gas from the onshore Elk and Antelope gas fields. Operations are due to start in 2014.

FLEX LNG completed the generic FEED in 2009. The project-specific FEED should get under way in May 2011, with the parties hoping to reach a final investment decision (FID) before the end of this year.

The parties say this will be the world’s first floating facility to produce LNG.

FLEX LNG and Samsung will be responsible for design, engineering, construction, and commissioning of the FLNG vessel. FLEX LNG will also be co-operator of the unit with LNGL, the joint venture between InterOil and Pacific LNG.

Construction of the FLNG unit will be fully financed until delivery. The equity which FLEX LNG has already paid to Samsung will cover all payments to the shipbuilder until delivery of the FLNG unit, when one final instalment will be due.

The FLNG vessel is expected to be moored alongside a jetty, which will be shared with LNGL’s land-based LNG facilities, with a nominal production capacity close to 2 MM tons/yr of LNG to process an estimated 2.25 tcf of gas over a firm 25-year period.

04/11/2011