Floating liquefied natural gas (FLNG) technology took center stage this week with the arrival of a major new FLNG ship in Lithuania. The Independence FLNG ship was greeted by onlookers and well-wishers, but the event was also billed as a concrete step towards breaking Europe’s dependence on Russia for natural gas.
The Independence will have the capacity to regasify 4 billion cubic meters of natural gas each year, more than enough to meet Lithuania’s entire gas demand with enough left over for other Baltic states.
Onshore LNG liquefaction and regasification terminals have been around for years, but FLNG ships are relatively new and are only now beginning to break into the market, highlighted by the arrival of the Independence to the Baltic region.
While there are a variety of factors that ultimately determine the economic viability of FLNG ships over LNG import terminals, the Lithuanian Energy Ministry says it expects to procure LNG at prices of about $345-$383 per thousand cubic meters (or $9.39-$10.43 per million Btu). That competes favorably against natural gas from Russia, for which Lithuania paid $488 per thousand cubic meters earlier this year.
There are a series of exciting benefits that FLNG ships offer, which will be discussed further below.
Floating Storage and Regasification
FLNG ships come in two main varieties. The first is floating storage and regasification units (FSRU), which are vessels that can be moved…