Exxon and BHP gain approval for Scarborough floating LNG

BHP and ExxonMobil have been granted Federal approval for a massive floating LNG plant off the West Australian coast near Exmouth, a project worth $10 billion.

The multi-billion plan to develop the Scarborough gas deposit is currently in the pre-front end engineering design phase, with a final investment decision expected by the companies in 2014-15.

"ExxonMobil is in the early stages of developing the Scarborough project and significant progress has been made," a company spokesman told the AFR.

If the project goes ahead, it will be the largest FLNG facility in the world at 495 meters long, 75 meters wide and capable of processing between six to seven million tonnes of LNG per year.

ExxonMobil has previously said the development would involve the drilling of 12 wells in two phases, starting with seven over the period from 2018 to 2019.

In addition to the gas treatment and liquefaction facilities, the vessel would be fitted with up to 10 storage tanks inside, with an on-board storage capacity of around 380,000 cubic meters.

It is estimated 80-110 cargoes would be offloaded from the facility each year.

FLNG technology involves using the same components of a traditional land-based LNG plant onto a ship that sits directly above offshore gas fields.

Australia is set to become the birth place of FLNG, with Shell currently building the world-first Prelude structure which is set to be moored off the WA coast by 2016.

Santos and GDF Suez are also looking into the development of a FLNG vessel for the Bonaparte Basin, 250 kilometres west of Darwin. A final investment decision is expected in mid-2015.

FLNG technology allows for the development of gas fields considered too remote or too small to develop via traditional methods previously and is being seen by many as more advantageous then onshore facilities due to high costs.

Shell Australia’s former chairwoman Ann Pickard has previously touted FLNG as the saviour of LNG development in Australia.

"We do see it as probably the potential saviour of the Australian LNG industry over the next decade or so."

“Australian LNG is the highest cost globally,” she said, stating that countries like the United States and Canada could export to Japan 20 per cent cheaper.

Image: offshoreenergytoday.com

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.