While Dutch super major Shell claims it will be the first to launch a Floating Liquefied Natural Gas (FLNG) vessel, one junior oil and gas company is on track to have one in operation 2 years sooner. If you want to invest in FLNG, this tiny company could be your meal ticket to riches…
If you recall earlier this year, startling new evidence from reputable sources claimed that the Wright Brothers were not the first to successfully fly an airplane.
The prestigious aviation journal Jane’s All The World’s Aircraft acknowledged back in March that in fact, the record should belong to a Connecticut inventor named Gustave Whitehead.
Of course if the Jane’s claims prove to be true, then Whitehead’s August 14th, 1901 flight near Bridgeport would’ve beaten the Wright’s maiden flight by more than two years.
This radical revision of the history of aviation is still ongoing as lawmakers from Connecticut continue to spar with lawmakers from Ohio and North Carolina about what truly took place over a century ago.
Now, a similar controversy is happening in the energy sector… only this time, the outcome could be monumental for investors.
You see, Royal Dutch Shell has been tooting its horn ever since they signed an agreement with Technip and Samsung back in 2009 to begin developing what they believe would be the first floating liquefied natural gas (FLNG) vessel in the world.
The much lauded Prelude FLNG project to be moored offshore Western Australia is expected to be the largest piece of floating machinery ever constructed by man.
Here are just a few quick facts about this behemoth:
- Its deck will be longer than four football fields (488m long and 74m wide)
- Its storage tanks will hold the same volume of liquids as 175 Olympic-size swimming pools
- It will displace the same amount of water as six Nimitz-class aircraft carriers (the largest in the world)
- It will achieve a production rate of at least 3.6 million tonnes of LNG per year
- It will begin production in 2017 and have an operational lifespan of 20-25 years
But while there’s no disputing the fact that the Prelude will be one incredible piece of human ingenuity, it certainly won’t be the first FLNG facility to be in operation.
That honor should be going to Belgium’s Exmar NV (EBR:EXM) instead.
In partnership with Canadian-based Pacific Rubiales Energy Corp. (TSX:PRE), Exmar will be operating an FLNG liquefaction, regasification and storage unit, or FLRSU off the Caribbean coast of Colombia.
The vessel will be moored 3 kilometers offshore of Tolu, Colombia and will be developing gas from the onshore La Creciente field of the Lower Magdalena Valley Basin.
Though comparatively smaller than the Prelude barge, the Exmar’s unit is expected to convert 72 million cf/d of natural gas into roughly 500,000 tons of LNG per year.
The liquefied gas will be held onboard its 14,000 cubic meter capacity storage tanks and subsequently offloaded by either shuttle tanks or more permanently-moored floating storage facilities.
What’s more, the FLNG unit is planning to set sail sometime in Q1 2015 – two years ahead of Prelude.
And that’s not all…
A second Exmar vessel is in the works, and it too will be in operation before Prelude.
In August, Exmar with LNG Partners, LLC and LNG BargeCo BVBA signed a Letter of Intent to commission a Floating Liquefaction and Storage Unit for the BC LNG Project near Kitimat, British Columbia, Canada.
The Project has already received its export permit and is on track to clear remaining permitting and approvals by the end of 2013.
In addition, Exmar has financed construction with a CAD$50 million non-refundable deposit and expects to deliver the barge by Q1 2016.
Simply put: Exmar is on a roll.
Though the Antwerp firm isn’t likely to show-up Shell anytime soon, that should suit investors just fine.
Mark my words, FLNG is going to be one of the hottest acronyms in the industry over the next few years… and small companies like Exmar (rather than Shell) are the ones who will be flying high.