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China Has Invested Heavily In African Floating Natural Gas Projects
Oct 14, 2017

China plans to invest nearly $ 7 billion in Africa to float liquefied natural gas projects and invest in an unknown technology sector, hoping that the energy market, which began production in the early 1920s, will recover.


Due to the weak shipping and natural gas markets, the western banking industry has been cautious, coupled with high technical difficulty, including the exploitation of submarine natural gas, cooling it into liquid and moving it to the tank on the floating platform.


However, China is based on a strategic perspective, targeting FLNG as the lowest cost of floating equipment sellers, and leading the world to develop this still booming technology. So far, there is only one FLNG project in the world.


China is working to improve urban air quality, natural gas to replace coal as an environmental energy needs. China has also funded 12 billion Russian traditional liquefied natural gas projects in the Aralian Arctic Ocean. In contrast, the US sanctions against Russia made Western banks a few miles away from the project.


China has also funded three FLNG projects along the coast of Africa to provide loans or pledge nearly $ 4 billion in financing. The other two projects cost a total of $ 3 billion, China will not only plan to provide financing, but also will build a production platform.


"We see that China is investing heavily in the FLNG project and the consumption of liquefied natural gas, the lower the cost, the lower the potential cost of liquefied natural gas," said Steve Lowden, chairman of NewAge. "The company is preparing for the Republic of Congo And Cameroon to implement the FLNG project.


The FLNG project is very attractive to resource-rich but heavily indebted poor countries. The production cost of the FLNG project is much lower than that of the land-based natural gas project, and by 2013 the price of natural gas has quadrupled within 10 years.


This is at least theoretically feasible. But the reality is that FLNG technology is very complex. Taking Shell's huge PreludeFLNG project as an example, the project will be the largest FLNG project in the world, but the equipment must be compressed in only one quarter of the land area.


Wave and ocean currents also increase the technical difficulty.


Overture project investment of 12.6 billion US dollars, is expected to put into operation in 2018, which is a typical project of high energy consumption. However, LNG spot prices have fallen by 70% since the beginning of 2014 and are expected to remain under pressure or further decline due to increased supply of conventional production equipment in Australia and the United States.