The role of LNG and FSRUs in energy security in West Africa

Liquefied Natural Gas (LNG) has emerged as a crucial player in the global energy landscape, offering a cleaner and more versatile alternative to traditional fossil fuels. LNG is natural gas that has been cooled to extremely low temperatures, turning it into a liquid state for easier storage and transportation. The demand for LNG has grown significantly in recent years, driven by its environmental benefits and its role in diversifying energy sources. To accommodate this increasing demand, efficient infrastructure for storing and transporting LNG is essential. This summary explores what LNG is, the infrastructure required for its storage, and why Floating Gas Storage Terminals (FGSTs) are becoming an attractive and efficient option for LNG storage, especially in West Africa.

What is LNG?

1. Liquefaction process

LNG is produced through a complex process known as liquefaction. Natural gas, which primarily consists of methane, undergoes cooling to approximately -162 degrees Celsius (-260 degrees Fahrenheit). This process transforms the gas into a liquid state, reducing its volume by about 600 times. The resulting LNG is colourless, odourless, and non-toxic, making it a safer and more practical form for transportation and storage.

2. Transportation

Once liquefied, LNG can be transported over long distances using specialised cryogenic tanker ships. These vessels are equipped with advanced insulation and containment systems to maintain the extremely low temperatures required for LNG storage. The ability to transport LNG across oceans facilitates the global trade of natural gas, connecting suppliers with consumers worldwide.

3. Floating Gas Storage Terminals (FGSTs)

The infrastructure for storing LNG is a critical component of the entire LNG supply chain. It involves facilities designed to maintain the low temperatures necessary for LNG's liquid state, ensuring the gas remains in a condensed and transportable form. The key components of LNG storage infrastructure include onshore storage tanks and, more recently, Floating Gas Storage Terminals (FGSTs).

Floating Gas Storage Terminals (FGSTs) have gained prominence as an innovative and efficient solution for LNG storage. Unlike traditional onshore tanks, FGSTs are floating structures located offshore. They leverage the natural buoyancy of the sea to provide a stable and secure platform for LNG storage. Where FGSTs are deployed, LNG cargoes are typically transported by specialised tanker and delivered to the FSRU. From that point, the FSRU can offer LNG to trucks, barges or trains for regional needs, or provide high pressure natural gas after turning the liquified natural gas to its previous gasified state.

Floating Storage Regasification Units (FSRUs) have become increasingly popular in the LNG industry, due to their ability to provide versatile and efficient solutions for delivering natural gas to regions with diverse energy needs, or where onshore infrastructure is scarce. FSRUs are equipped with regasification facilities that convert LNG back into its gaseous state. This process involves heating the LNG, typically using seawater or onboard heaters, to return it to its original form as natural gas. They also have systems for offloading natural gas to onshore pipelines or distribution networks, which can involve the use of flexible hoses, loading arms, or other transfer mechanisms.

The potential of incorporating FSRUs in broader gas-to-power infrastructure in places like West Africa, where there is typically a high upfront cost to building the gas infrastructure onshore, strengthens the argument for its deployment. Their ability to adapt to changing demand, coupled with rapid deployment capabilities and cost-efficiency, positions FSRUs as a key component of the evolving LNG supply chain. 

The decarbonisation potential of LNG in West Africa

LNG is considered a clean-burning fuel that can improve both the diversification and health of Africans, as biomass or coal is typically used for purposes such as cooking and power generation. Gas-powered generators are gaining ground as natural gas becomes more economical, for example. When evaluating the decarbonization potential of LNG in the West African region, it's essential to compare it to the conventional fuel sources commonly used in the area, such as diesel, heavy fuel oil (HFO), and coal.

Rough estimates demonstrate that combustion of LNG generally results in around 50-60% fewer carbon dioxide (CO2) emissions per unit of energy produced compared to coal and 20-30% compared to diesel. This represents a key opportunity to move West Africa on a path towards cleaner energy sources.

While offering much lower sulphur dioxide and nitrous oxide emissions, LNG will also be key in the energy transition of Africa away from the more carbon-intensive options mentioned. FInally, methane, the primary component of natural gas, although a potent greenhouse gas, can be burned for energy or power distribution purposes. This reduced methane emissions compared to venting or flaring it, important when considering that methane emissions have a greenhouse gas effect 4 times stronger than carbon dioxide.

a. Components of FGSTs:

Floating Gas Storage Terminals consist of several key components:

i. Floating LNG storage unit (FLSU)

The core element of an FGST is the Floating LNG Storage Unit (FLSU). This is a large, purpose-built vessel designed to store LNG. FLSUs are equipped with advanced containment systems and insulation to maintain the low temperatures required for LNG storage. These vessels are often moored to the seabed to ensure stability.

ii. Offloading systems

FGSTs incorporate offloading systems that allow the transfer of LNG to smaller vessels or onshore infrastructure. These systems can include flexible hoses, loading arms, or other mechanisms to facilitate the safe and efficient transfer of LNG.

iii. Mooring systems

To ensure stability in open waters, FGSTs employ robust mooring systems. These systems use a combination of anchors, chains, and tensioning devices to secure the FGST in place, preventing excessive movement due to waves, currents, or wind.

b. Advantages of FSRUs in West Africa

Floating Gas Storage Terminals offer several advantages that make them an attractive option for LNG storage in areas with more sporadic energy infrastructure and distribution networks:

i. Flexibility and mobility

FGSTs provide a high level of flexibility as they can be deployed in various locations based on changing market demands. This mobility enables a more dynamic response to shifting patterns in LNG supply and demand.

ii. Rapid deployment

Compared to the construction of onshore storage facilities, FGSTs can be deployed relatively quickly. This rapid deployment is particularly advantageous in regions where infrastructure development is constrained by factors such as regulatory approvals, land availability, or geopolitical considerations.

iii. Cost efficiency

FGSTs can offer cost advantages over traditional onshore storage tanks. The modular design of FLSUs allows for standardised construction and economies of scale, potentially reducing overall project costs. Additionally, the avoidance of extensive land acquisition and preparation expenses contributes to cost efficiency.

iv. Environmental considerations

The offshore location of FGSTs minimises the impact on coastal ecosystems and reduces the risk of incidents affecting populated areas. This aligns with environmental and safety considerations, making FGSTs a more sustainable option for LNG storage. Additionally, FSRUs do not disturb the seabed to the same extent as onshore storage, which may require seabed excavation or new infrastructure to be built on the coast. The buoyant design allows these units to be moored in place without the need for substantial seabed interventions, reducing habitat disruption for benthic organisms.

v. Enhanced safety

FGSTs benefit from being located offshore, reducing the risk of potential hazards associated with onshore facilities. The isolation from populated areas enhances safety measures and mitigates the consequences of accidents or malfunctions. Placing FSRUs offshore also helps avoid critical coastal zones, where many aquatic species breed, feed, and migrate. By staying in deeper waters, FSRUs minimise the risk of interference with important ecological processes in nearshore environments.

The Landscape in West Africa Today

Floating LNG potential in West Africa has been tapped quite extensively so far, with a number of key developments and projects seen in the past decade:

Unfortunately, a number of projects in the past were shelved and abandoned due to inability to raise sufficient financing, delays on contracts, amongst other geopolitical factors. The flexibility of FSRUs, in the sense, are additionally beneficial to the West African landscape due to the ability to re-export any imported LNG from the terminal should such balance of payments be necessary. 

In the specific context of Nigeria, the most populous country in West Africa, gas flaring has been a significant challenge. Gas flaring is the controlled burning of natural gas that is often released as a byproduct of various industrial processes, particularly during the extraction of oil. This process involves igniting the gas at the wellhead, resulting in the combustion of hydrocarbons and the release of carbon dioxide (CO2) and other pollutants into the atmosphere. While gas flaring is sometimes done for safety reasons, such as during emergencies or equipment malfunctions, it is primarily an intentional and routine practice in many oil-producing regions. This causes a multitude of subsequent environmental problems, including air pollution and local ecosystem challenges, particularly concerning soil quality and aquatic life.

FSRUs offer a promising solution to convert flared gas into a valuable and marketable resource. This not only addresses environmental concerns but also aligns with the country's goals of maximising the economic benefits of its abundant natural gas reserves.

In the context of gas-rich nations with active oil & gas economies, such as Nigeria, FSRUs can also aid in the monetisation of stranded gas that is flared during upstream operations. Gas reserves that are not easily accessible or economically viable for traditional onshore facilities can be efficiently exploited using FSRUs. This allows for the extraction and export of gas that might otherwise go untapped.

FSRUs provide net LNG producers with the opportunity to diversify their LNG export markets. By having a mobile and adaptable LNG infrastructure, countries like Nigeria can respond to changing global demand patterns and explore new trading partners.

As technology and infrastructure continue to advance, FSRUs are likely to play a pivotal role in the global LNG market, offering countries like Nigeria a strategic and efficient means of harnessing their gas wealth for economic development and sustainable energy solutions.

Floating storage offers the flexibility to tackle decarbonization of the West African region, where large-scale onshore infrastructure investment typically experiences long delays and limited access to capital. By offering a cleaner-burning alternative to conventional fuels, lower carbon emissions, and flexible use both in domestic power generation and international export, FSRUs make it a valuable contribution to the region's efforts to both strengthen energy security through diversification and sustainable investment.

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