2008 Annual Report - SBM Offshore

SBM Offshore Annual Report 2008 / Report of the Board of Management77Gas & Power ActivitiesGeneralAnticipating the future growth of energy consumption andalso the importance of gas as a world energy source, a ‘Gasand Power’ division was created in January 2004 to developtechnologies, in particular for the offshore production ofLiquefied Natural Gas (LNG) and the infrastructures tohandle the liquid gases from the production sites to thedelivery points. Since then, several development projectshave been ongoing on themes related to: 1) Offshore LNGProduction, 2) Offshore LNG Offloading, 3) Offshore LNGRegasification and 4) Green Energy Production.As the new products reach technical maturity they arebeing and will be proposed to the gas industry. They willplay a major role in the future growth of the Company, inmuch the same way as the products developed in thepast for the oil business have been the fuel for growthover the last 30 years.having significant ‘build, own and operate’ experience incryogenic gas plants. Linde is one of the global leaders inthe process of hydrocarbon gases.The companies have formed a partnership to develop abusiness for the design, construction and subsequent saleor lease and operation of LNG FPSOs.A very significant technical effort was started in 2007, andextended and consolidated in 2008 to design an LNGFPSO that is robust, safe, uses only proven componentsand is economically feasible. Additionally the design isgeneric, meaning that the same, or very similar design,will be suitable for many different applications such that itis flexible enough to enable deployment at the majority offields with different gas compositions. It is envisaged thatthis generic approach will allow a series of very similar LNGFPSOs to be developed in a relatively short time scale,thereby taking advantage of the business prospects thatare expected to flourish with this ‘enabling technology’.Offshore LNG ProductionThe most important project and the one which shouldsignificantly impact the future profile of SBM Offshore isthe LNG FPSO; a means to develop, in a cost effectivemanner, gas reserves that were previously perceived asbeing either stranded (remotely offshore) or impracticalor uneconomic for development by means of traditionalschemes (pipeline export or onshore liquefaction). Thesignificance of providing a solution for floating liquefactionof natural gas is that the industry may re-look and rethinkthe way it values gas assets.The design’s robustness, reliability and safety are obtainedby a combination of the following features:• using a proven liquefaction process and anexperienced LNG plant designer and operator as apartner;• providing the Company’s design and operationexperience for offshore facilities;• a LNG containment system that is designed toaccommodate sloshing loads;• a safe topsides layout.As such the LNG FPSO is considered a strategic assetwith a lot of inherent value, yet at the same time it istechnically complex and capital intensive. A partnershiphas been established early 2007 with Linde A.G., a majorGerman-based public listed company with a leadingposition in gas processing and liquefaction technology andThe LNG FPSO has been designed as a fully stand-alonesystem for field development and as such has extensivepre-treatment facilities that can handle untreated wellfluids, making it independent of any infrastructure andeliminating the need for new pipelines, platforms, etc. TheFPSO facility will be able to treat, fractionate, liquefy, store