China plans support African floating LNG projects
China plans to spend almost $7 billion into floating liquefied natural gas projects in Africa.
The plans bets on largely untested technology, in the hope that energy markets will recover by the time they start production in the early 2020’s.
Western banks are wary of the plan due to the state of the shipping and gas markets, as well as the technical difficulties of pumping gas extracted from below the ocean floor, chilling it into liquid form on a floating platform and transferring it into tankers for export.
China, however, wants to make a push into floating liquified natural gas, and is aiming to become the lowest cost seller of the floating plants and become the global leader of the technique.
The country needs the gas as a cleaner alternative to coal to improve the air condition in its cities, and has already lent the Russian Yamal LNG project $12 billion.
FLNG is also beneficial to debt-burdened African countries. Projects can sail into place and begin exporting for much less than the cost of onshore plants.
"We see a real commitment to FLNG in China both from the construction side and from the LNG consumption side where decreasing costs mean potentially lower cost LNG," said Steve Lowden, chairman of Jersey-based NewAge which is planning FLNG projects off Congo Republic and Cameroon.