One small vessel, big ambitions
A boutique-sized Perth-based company called Transborders Energy has developed a low-cost, off-the-shelf package designed to exploit discovered small-scale stranded gas fields off Australia with an ultimate value of US$65Bn.
And if the concept goes as well as Transborders expects, there is another US$260Bn of stranded assets around the world waiting to be monetised, according to the company’s estimates.
The company’s winning proposition is intended to be a compact and replicable floating LNG vessel that can be deployed to small-scale LNG developments at a known budget. The resulting gas would then be sold to markets looking for modest volumes.
And Transborders’ managing director Daein Cha is in no doubt there is a lot of them out there, certainly enough to buy around 1.2M tonnes a year, which would be the capacity of one of the vessels. “Transborders promotes a different approach to achieve commercialisation [of the small fields],” he said.
First, the strategy is based on the budget-sized FLNG and matching fields. Second, the economics are built around a target breakeven price for the LNG. Third, the finance and essential commercial structures are developed in bespoke packages for each field. Fourth, the off-take contracts are sufficiently secure to attract lenders.
The company is banking on a coming shortage of LNG, starting from the mid-2020s. “The development of these discovered but stranded offshore gas resources is a significant untapped opportunity,” explained Mr Cha in a presentation. Transborders is not in the business of exploration, but of exploitation. The company has identified about 240 known fields – and roughly 40 of them are in Australian waters.
Currently, the group is working with an unnamed Asian group on designing the generic FLNG that lies at the heart of the overall strategy. “We will be the leader in accelerating the monetisation of stranded gas resources by deploying our predetermined, low-cost generic FLNG solution,” Transborders said.
As production of LNG lags demand within the next five years or so, Transborders expects the streamlined nature of its concept to come into its own. Citing the up to 10 years that it takes to bring an LNG project online, the company believes the prepackaged deal will speed things up so much that small-scale fields will become much more viable.