Eni's chief operating officer of natural resources is optimistic about expanding the use of floating liquefied natural gas (FLNG) vessels, particularly offshore Mozambique, due to the region's substantial gas resources and the now comparable unit costs between newbuild FLNG vessels and onshore liquefaction plants.

Success and Evolution of FLNG Projects

Following the successful 2022 launch of the Coral South FLNG project, Eni and its partners sanctioned the $7.2 billion Coral North project. The journey began when the FLNG industry was viewed skeptically due to prior projects with cost overruns and delays. Coral South proved the technology's viability by being delivered on schedule and budget, even during the COVID-19 pandemic. Eni has since built expertise with projects in Congo-Brazzaville.

Coral North: An Enhanced Replica

Coral North is not a simple copy of its predecessor but an enhanced version. The development schedule has been reduced from 60 to 48 months, and liquefaction capacity increased by 5% to 3.6 million tonnes per annum. Despite 20% industry cost inflation over eight years, Eni maintained the same capital expenditure by applying over 1,000 lessons learned from Coral South, involving improvements in processes, materials, and design. Collaboration with the same contractors—Samsung Heavy Industries, JGC, and Technip Energies—was key. Schedule acceleration was achieved through better integration, parallel commissioning activities, and a reduction in subsea wells from six to five, with one backup, due to exceptional well performance.

Cost Competitiveness and Advantages of FLNG

FLNG technology has become highly cost-competitive, with costs per million tonnes per annum of capacity close to those of onshore facilities. Costs range from about $600 million for shallow, calm waters to around $800 million for deep-water, harsh environments. FLNG offers significant advantages in security, safety, and delivery schedule, as vessels are built in experienced yards. This contrasts with large, remote onshore plants that require extensive new infrastructure and the management and training of tens of thousands of workers, who may leave after the project. Furthermore, offshore facilities avoid the complex community relationship challenges often associated with onshore construction.

Future FLNG Potential in Mozambique and Beyond

The Coral South and North projects will each exploit about 5 trillion cubic feet (Tcf) of the Coral field's 15 Tcf of recoverable reserves, leaving 5 Tcf available. This gas, along with other non-straddling discoveries in Offshore Area 4 whose gas is not allocated to the planned onshore Rovuma LNG project, presents scope for a third FLNG vessel, though it may not necessarily be on the Coral field. In Area 4, ExxonMobil leads the onshore development while Eni focuses on offshore liquefaction.

Expansion to Argentina

Beyond Africa, Eni is pursuing FLNG in Argentina with partners YPF and XRG (an Adnoc affiliate). The Argentina LNG scheme, supported by the vast Vaca Muerta shale gas resources (308 Tcf), plans to deploy two shallow-water FLNG vessels moored near shore. Studies are ongoing to determine if gas processing will be onshore or on the vessels, with the former being more likely. In principle, this simpler design could lead to lower costs and faster construction compared to a vessel like Coral North, which hosts processing equipment, but the concept is still in the engineering phase. The two vessels would supply 12 million tpa of LNG in total, with an option for a third. A final investment decision is targeted for mid-2026, aiming for exports around 2030.