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Engie pursues floating LNG opportunities with Sembmarine partnership

Sun 16 Apr 2017 by Karen Thomas

Engie pursues floating LNG opportunities with Sembmarine partnership
Christophe Renier: Gravifloat technology is versatile and offers many advantages

French energy giant Engie is pursuing new opportunities in offshore and nearshore LNG. Small-scale bosses Christophe Renier and Frédéric Deybach outline their priorities.

Engie is on a mission to lead the energy transition towards cleaner-burning fuels. The company, which is investing in renewables too, has put LNG at the heart of that mission. Its goal is to extend its presence along the entire length of the LNG supply chain.  

With a glut of supply depressing prices and investor appetite to back new production projects, new importers are rushing to take advantage of cheaper, more plentiful LNG. That trend has driven a flurry of orders for floating storage and regasification units (FSRUs), with six ordered or confirmed last year.

FSRUs make it quicker and cheaper to take delivery of first cargoes, and can offer a fast-track solution to buyers seeking their first volumes or a way to increase their existing offtake.

Within its fleet of 12 LNG carriers, Engie charters two FSRUs. Neptune took position in Turkey at the end of last year, as the first floating LNG import terminal in the country. ETKI LNG is expected to deliver up to 5.2 billion cubic metres per year.  

Engie also charters GDF Suez Cape Ann. However, the company is now moving further down stream.

Last autumn, it signed a memorandum of understanding with Singapore-based shipyard Sembcorp Marine to develop new offshore and near-shore terminals to support LNG-to-power projects using a new design concept, Gravifloat.

Gravifloat is a steel, modular floating structure fixed to the seabed on site. It can be scaled up or down to suit different sizes of project and configured to suit a range of shore-based plants and equipment types. The owner can refloat the unit and have it towed or delivered via heavylift ship to a new location once the contract expires.

Power plans

Engie and Sembcorp Marine Rigs & Floaters plan to develop the Sembmarine concept for small LNG power schemes, of size 10-300MW. Engie is driving the project through its key programme for small-scale LNG, part of the Gas Chain Métier, led by director Christophe Renier and manager Frédéric Deybach.

“Engie is considering this solution in part because there are issues around land acquisition for many prospective projects,” Mr Deybach told LNG World Shipping. “When we consider developing a floating solution, we have to take into account the material conditions of the project.

“We need a solution that is adaptable to offshore or nearshore, that does not require land but that is robust enough when facing a hurricane or a tsunami. That’s what drew us to explore the opportunity to use a gravity-based structure. Despite its name, a Gravifloat is floating only for a very short window within the project lifetime.”

“Most of the time, the unit is firmly anchored to the seabed,” Mr Renier adds. “If we need to move it – because the location no longer needs the unit or needs something bigger, with more power or more storage, we can refloat the top unit and replace it. The technology is versatile – we believe that it has many advantages.”

Gravifloat can support a liquefaction plant, a regas plant or a power plant. Engie is particularly interested in the latter option.

“Our plan is to position ourselves to serve a market that is changing,” Mr Renier says. “We are seeing particular growth in demand for smaller electricity-producing installations and for solutions that can be delivered within a short period. This is why we are exploring integrated LNG-to-power solutions.”

Separately, Engie has signed a memorandum of understanding with Wärtsilä to develop small-scale solutions and services for LNG shipping. Together, they plan to develop LNG for ships, LNG distribution to remote areas, LNG-to-power and small-scale LNG and bio-liquefaction. That partnership complements the Gravifloat partnership.

Savings

Building floating systems and the power-generation equipment simultaneously can cut both time to market and cost. “We can achieve synergies by doing this,” says Mr Deybach. “Demand for power is driving this kind of integrated solution. The Gravifloat partnership is a partnership with a shipyard – this allows us to bring together all these elements.

“Everything is built in the shipyard. When it comes to an integrated approach, this is the ideal solution. It gives us access to a very controlled environment for building engines, or gas turbines, or combined-cycle power systems, as well as the tank, in whatever size we need. That means we can work quite quickly to deliver our solutions – everything is assembled and tested before reaching the project site.”

The question, of course, is how quickly. “For certain projects, it is often the quicker the better, as they depend on new power generation to avoid electricity shortages”, Mr Renier says. “Everything depends on the solution, on the environment. A combined-cycle gas turbine takes longer to build than an engine, for example. And custom-made solutions will also take longer than simply assembling off-the-shelf solutions.”

That difference explains why Engie is reluctant to build units on spec.

Gravifloat has been linked to two proposed LNG projects. One is a Chinese-led production venture to tap gas reserves in Ethiopia’s Ogaden Basin, off Djibouti, in which the Gravifloat base will be fitted with a liquefaction topside.

Sembmarine has also been linked to a Gravifloat-based regasification project in shallow waters off Bangladesh, where the authorities are considering multiple LNG-import proposals for the port city of Chittagong.

Neither is an Engie project. The partnership with Sembmarine does not give Engie the exclusive right to develop Gravifloat technology.

Engie says its target markets for Gravifloat-based solutions include the Asia-Pacific region, particularly island states such as the Philippines and Indonesia, as well as Africa and the Caribbean. “We are looking at island nations and at areas that have challenging environmental conditions that would benefit from this kind of solution,” Mr Deybach says.

“To have either of these projects move forward would tick a couple of boxes. There are always questions when it comes to new technology. At the same time, these projects have not started, so will not be able to feed back experience based on years of service.

“We see benefit from our co-operation with Sembmarine. At the same time, that co-operation is not exclusive on either side.”

Engie’s small-scale LNG development strategy includes buying into projects that show promise, Mr Renier says. “Our plan with these projects is to take an equity stake with our partners and to operate the projects,” he says.

The challenge is to devise the right solution for the project in question. Engie’s small-scale team shares potential leads with colleagues developing conventional LNG shipping and FSRUs to come up with the most suitable offering for the project in question.

“It’s about having access to a range of possible solutions,” Mr Renier concludes.

And so, Engie continues its search for its first Gravifloat-based venture. Watch this space.