The battle of the gas-sucking mega-giants start

Shell

Off the coast of Western Australia, a battle between the mega giants takes place. The fighters engage with the world’s biggest semi-submersible platform, the longest subsea pipeline in the southern hemisphere, and the largest floating facility ever built.

They are all there for the same reason: natural gas – and they hope to start drawing until this month.

As several countries begin to move away from coal as an energy source, this alternative to fossil fuels, which produces 50% less carbon dioxide for each unit of energy produced, is increasingly in demand in our energy hungry world.

The consumption is expected to reach 177 trillion cubic feet (tcf) or 5,012 billion cubic metres by 2040, against 124tcf in 2015, says the US Energy Information Administration.

This is why Shell’s gigantic Prelude to the platform, which is 488m (1,600-feet) long, and moves about as much water as six aircraft carriers – is in competition with the Japanese firm Inpex for the access to gas in the Browse Basin.

Although they are working on gas fields, these fields are connected. Shell and Inpex are essentially vying for the same resource.

“The way I describe it – I have an image that I present to clients, and I have a picture of two people drinking from the same milkshake,” says Saul Kavonic, an analyst at energy consultancy Wood Mackenzie.

Prelude is a true monster. The largest vessel the world has ever seen

It has been designed not only to collect gas from sub-sea well heads, but also liquefy it on board at temperatures of -162C.

As a liquid, the gas takes up significantly less space, making it easier to transport around the world on board of the vessels. This liquefaction is usually carried out after the piping of gas onshore, but a Prelude can do the job itself – something never achieved on such a scale before.More Technology of Business

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Some serious technology is involved in the achievement of this objective.

Prelude a high-capacity pumps, which may draw 50 million litres of sea water every hour to help cool the natural gas. Once liquefied, it is then stored in large storage tanks with a volume equivalent to 175 Olympic swimming pools.

And all this to continue, even through the worst imaginable weather. Prelude of heavy mooring chains are designed to withstand Category 5 cyclones.

While Inpex has opted to send its gas onshore for the liquefaction, it also has a huge offshore semi-submersible platform to extract water and impurities from the gas. And nearby, there is a floating storage and offloading facility called Venturer.

INPEX Australia

Collectively, Inpex has dubbed these bits of mega-infrastructure Ichthys – Greek for fish.

However, both projects have suffered delays and cost explosion, which may be why neither company was prepared to speak to the BBC for this function.

The pressure of the gas commissioning of the first of course is intense.

The race for the Browse Basin gas has further ignited competition at the international level. Australia may surpass Qatar to become the world’s largest exporter of liquefied natural gas (LNG) once Ichthys and Prelude production is in full swing.

But in the future, any vessel equal to or even exceed the scale of Prelude?

Dr. Kavonic says the fossil fuel industry is not likely to try to build one any time soon.

“We need new projects to meet the demand [for gas] in the early 2020s,” he says. “We need projects to be sanctioned in the last year which has not taken place, we have seen that one.”

This unique project will be built in Italy by the oil and gas giant Eni. A floating installation off the coast of Mozambique, it will have a slightly smaller capacity than Prelude – 3.4 million tonnes of LNG per year, compared to a Prelude of $ 3.6 million. The capacity of Ichthys will be much more important, to 8.9 million tonnes.

“There has been no [other] similar projects under the radar,” explains Jean-Baptiste Dubreuil of the International Energy Agency.

Allseas

The only other comparable ship would be Allseas’ Amazing Grace – a huge twin-hull construction of ships to be built in the coming years. His task will be to lift offshore platforms, however, no process gas.

No more projects for the production of gas, observers of the industry worry that, in five years, the demand for natural gas could outstrip supply.

There is the specter of a clash of LNG supply in the early 2020s” looming, ” said Stuart Elliott, the gas of the editor to the data provider S&P Global Platts.

The problem could be particularly pronounced in Asia, particularly in China.

“Last year, the Chinese production increased by 8%, but they are not able to follow the growth of the demand,” says Mr. Dubreuil. “We expect that their needs for imports will increase over time.”

In fact, the IEA estimates that China will be importing 43% of its natural gas by 2040. This offer must be reliable if the country wants to avoid the shortages of gas experienced it last winter, caused, ironically, by a botched attempt to cut the use of coal.

Getty Images

In the meantime, there is little hope that the unexpected rapid growth of renewable energy, particularly solar and wind power will help fill the gap.

But there is little doubt that over the next few decades, many countries, including the united KINGDOM, will be heavily dependent on gas for their energy needs.

Prelude and Ichthys are due to come online soon, but neither Shell nor Inpex will publicly commit to a start date.

And with wholesale natural gas prices are currently half what they were at the beginning of 2014, these multi-billion dollar projects can never recover their investment.

As climate change climbs to the summit of the global agenda, the financing of these huge fossil-fuel extraction projects – impressive feats of engineering they are – will look increasingly risky.

Both Shell and Inpex must be hoping that their marine mega-giants do not go the way of the dinosaurs.Click here for more of the Technology features for CompaniesFollow the Company’s Technology editor Matthew Wall on Twitter and Facebook