By Wendy Laursen 2015-05-17 19:38:31
The world’s first coal seam gas LNG train saw its first cargo delivered in January 2015. Over the next three years, the start-up of this first train from Australia’s Queensland Curtis LNG (QCLNG) will be followed by the commissioning of another 13 trains.
But, says Adele Long, Upstream Analyst at Wood Mackenzie, there has always been concern about the success of the project amongst the wider LNG community, as the concept has not truly been tested before.
“Comparatively there was a higher level of confidence in Australia’s conventional projects Gorgon, Wheatstone and Ichthys. But so far, the conventional Australian LNG has been disappointing.”
These projects are between seven and 18 months behind their original schedule. “Inpex reports that the Ichthys project is around 68 percent complete,” says Long. “First LNG is still targeted for end-2016, but we take a more conservative view and model a mid-2017 start. For Inpex, the biggest project challenges are managing four massive subprojects separately and then bringing them together to be tied-in at the same time.
“There are significant challenges associated with managing the installation of one of the world’s longest subsea pipelines, extending 889 kilometers (552 miles), construction of the FPSO, the world’s largest semi-submersible centralized production platform (CPF) and two LNG trains. Given the significant level of activity in Korean shipyards, driven by other mega-projects, not least Prelude FLNG, management of the construction of the CPF and FPSO has been especially difficult, and we believe these critical-path items are behind schedule.”
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Wheatstone is around 60 percent complete. “It is arguably a simpler project, and with a three month head-start on construction, we had expected that it would be more advanced that Ichthys,” says Long. “However, dredging and complex site preparation had delayed construction at the site. We anticipate first LNG in mid-2017 against Chevron’s end of 2016 direction.
“Similar to Ichthys, keeping the fabrication of the central processing platform and topsides on track will be essential for the project timeline. In March 2015, development drilling was delayed around a month because of rig damage suffered following a cyclone.”
Shell continues to target a 2017 start for Prelude. Wood Mackenzie predicts first cargo will be delivered by September 2017 assuming some delay to the construction of the vessel and the lengthy commissioning required for a FLNG. “A lag of even a few months would impinge on the summer cyclone season, requiring start-up to be postponed until 2018,” says Long.
Chevron is now targeting a start date of the end of 2015 for Gorgon. Construction at Gorgon has been hindered by logistics and productivity challenges.
Wood Mackenzie expects Ichthys, Wheatstone and Prelude to suffer cost overruns, cushioned slightly due to the weakening Australian dollar and more favorable labor market conditions. By 2017, the three projects are expected to add 21 mmtpa to Australia’s LNG exports.
More coal seam gas projects are expected to start-up in 2015 following QCLNG including the Santos-operated GLNG and the Origin-ConocoPhillips-operated APLNG project. “Both these projects are largely on schedule and expected to start-up in the third quarter of 2015,” says Long. “Both projects have reached the critical commissioning phase with gas entering the plants in the first quarter of 2015.”
The second half of 2015 will see a train each to be delivered from GLNG, QCLNG and APLNG.
Long says that while coal seam gas projects have seen a shift in schedules, they have stuck much more closely to their original timelines, and their construction projects may prove to be more successful than those of their offshore counterparts.
This post was sourced from Maritime Executive: View original article here.
