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Excelerate Pursuing Floating Liquefaction

November 17, 2008
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Excelerate Energy's niche in the natural gas supply chain puts it in good standing as it attempts to carve out a place in the emerging world of floating natural gas liquefaction, or floating LNG (FLNG), Anthony Schiller, Excelerate director of upstream development, told NGI.

"We think because of our downstream asset base with the regasification technology and our buyer network and our ability to access downstream markets, that Excelerate together with Black & Veatch and Exmar provides the capability to really advance a source-to-market solution," Schiller said. "I don't know that you'll see our gas end up in all of our assets. But...we're taking on the molecule. We're taking ownership of the gas. As part of that certainly what we think differentiates us from other people who are advocating for floating liquefaction is that we do indeed have a solid history of creating proven floating solutions. As part of that there is the downstream network and a group of buyers out there."

Earlier this month Excelerate announced the formalization of its relationship with LNG shipping partner Exmar NV and with Black & Veatch, a provider of gas processing and liquefaction technology.

Excelerate has constructed two offshore LNG receiving terminals in U.S. waters. Its Gulf Gateway Energy Bridge Deepwater Port, located offshore Louisiana in the Gulf of Mexico, received its first LNG cargo in April 2005 (see NGI, April 11, 2005). It was the world's first offshore receiving facility and the first new LNG regasification facility in North America in more than 20 years. In May Excelerate's Northeast Gateway terminal off the coast of Massachusetts received its first LNG cargo (see NGI, May 26). Excelerate also owns and manages the Teesside GasPort LNG facility in the United Kingdom. In June RWE Group completed the acquisition of a 50% stake in Excelerate (see NGI, June 9).

For FLNG, Excelerate is looking at a modular design for its facilities that will allow for vessels capable of liquefying anywhere from 1.5 to four million metric tons per year; however, the sweet spot is about three million tons, Schiller said. "We've had prospective customers who have expressed interest in solutions for up to four million, but because we're building it on a series of liquefaction trains there is that inherent flexibility in the design.

"We don't want to do the one-ship-build-many concept. But on the other end of it you don't want to build a ship that's so tailored that you have to wait until you've identified a specific opportunity before you can go out there...We think the three million tons probably puts us in the position to commercialize most of the reserves we're looking at."

Schiller said geographically Excelerate is looking at opportunities around the globe, similar to other FLNG players. He named Australia, West Africa, South America and Southeast Asia as prospects. "There are certainly areas that I'm hyper-focused on, but it's all the same as everybody else," he said. "We're looking at everything. What we're saying internally at this point is nothing is off the table."

Excelerate said FLNG can be competitive on a cost basis with land-based liquefaction facilities of similar size. The company is not alone in pursuing FLNG. Royal Dutch Shell is pursuing FLNG, among others.

In September Kathleen Eisbrenner, executive vice president for global LNG with Shell Gas & Power International, told NGI that FLNG would be cost-competitive with land-based liquefaction (see NGI, Sept. 15). Eisbrenner was Excelerate's chief executive before she joined Shell.

At a conference in Bangkok in March, Jon Chadwick, Shell Gas & Power executive vice president, said the company had adopted a "generic approach" to its technology, "design-one-build many" approach. "Key dimensions are a 3.5 million tons per annum LNG facility, with additional hydrocarbon liquids capacity, 450 meters long by 75 meters wide..."

Shell is expected to have a floating LNG terminal operating off the coast of Dubai by the end of 2010, according to Shell's John Mills, regional vice president for gas and power, as reported by Bloomberg. Shell is considering FLNG facilities off the coasts of Egypt, Iraq and Australia. Another company, Flex LNG Ltd., is expected to have a 1.7 million-metric-ton facility operating off the coast of Nigeria in 2011, according to Bloomberg.

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