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Delfin advances newbuild FLNG project

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At the end of October, Delfin Midstream entered into new agreements for front-end design and engineering work (FEED) for its newbuilding FLNG project with Samsung Heavy Industries (SHI) and Black & Veatch.

Delfin started co-operating with both SHI and Black & Veatch in 4Q18 and successfully completed a pre-FEED study for a an FLNG in the first half of this year.

In parallel, the parties have been developing a term sheet for a lumpsum, turnkey engineering, procurement, construction, installation and commissioning contract (LSTK EPCIC) for the unit’s construction and completion.

Delfin said that the company and its partners were on-track for completion of the engineering work, including a fully termed LSTK EPCIC, by the middle of 2020.

Many land-based LNG export projects seek ‘economies of scale’ to lower their costs by developing 10 – 20 plus mill tonnes per year projects.

However, by re-designing existing offshore pipelines and building FLNGs at efficient, low-cost Asian shipyards, Delfin can achieve total capital costs around $500-$550 per tonne per annum for 3.5 mill tonne FLNGs, the company claimed.

Separate development

In addition, each FLNG can be developed independently with its own commercial and financial structure, which enables Delfin to offer standard HH+ or tolling models with terms of 10 to 25 years, integrated structures or joint venture arrangements with offtakers, producers and/or traders.

Delfin’s existing offshore pipelines connect directly to the extensive network of onshore pipeline systems, with ample supply capacity for the first two or three FLNGs, the company said.

The company also claimed to have the lowest costs for FID thresholds of just 2 to 2.5 mill tonnes per annum of firm offtake and with full commercial flexibility.

With four FLNG slots at the Delfin project for a total of 13 mill tonnes of LNG export and with up to eight mill tonnes per annum expansion potential with the Avocet project, the company claimed to offer large scale LNG production at the bottom-end of the cost curve.

Commenting on Delfin’s progress, CEO, Dudley Poston, said: “The two most important innovations of the last 20 years in the global gas market have been the shale gas revolution and the emergence of floating LNG technologies for regasification and liquefaction. Delfin combines these two innovations to offer the LNG market a low cost, simple and flexible LNG supply solution.

“Having completed permitting work with a positive ‘Record of Decision’ from the (US) Maritime Administration and a 13 MTPA non-FTA DoE export licence, Delfin’s successful technical co-operation with the two leaders in floating liquefaction, SHI and Black & Veatch, make the Delfin project one of the most advanced projects in the second wave,” he said.