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• Associated gas, i.e. gas that is a ‘by-product’ of offshore oil production and that cannot, economically, be processed and pipelined to shore. Such gas was previously flared, but for many years now, these practices have been declared unacceptable and the only solution has been to re-inject the gas into the reservoir. This can be beneficial in the short term in terms of enhancing the oil production, but will ultimately be detrimental as the gas/oil ratio inevitably increases. Typically, gas reserves would be smaller than 28bcm and the gas would be rich in natural gas liquids (NGLs)/condensates, some of which might be removed by processing on the oil FPSO.
• Stranded gas, i.e. gas from, typically, isolated pockets/gas fields remote from land and any other field infrastructure and for which it is demonstratively uneconomic to install the necessary pipelines to bring it to shore for processing and use. Such gas is frequently found in deep water (deeper than 1,000m) or very isolated from any other developments, i.e. further than 250km. Such gas is not exploited, because there is no value in developing wells when there are no economic means to export the gas. Such gas reserves can be significant, 140–1,400bcm, and many such isolated pockets have been identified.
  
  It is widely concluded that the above-mentioned reserves will eventually require an offshore solution to put the gas into exportable parcels. This could be either LNG or compressed natural gas (CNG), the fundamental assumption being that a pipeline solution would not be viable. Thus, such reserves remain tantalisingly off limits for project developers, who, so far, have always opted for a more conventional solution based on established shorebased technologies.
  
  The question is why it is like this; after all, most studies have concluded that there are no technical obstacles. It seems that it is because of the economics and innate conservatism of the whole industry that only onshore developments for LNG production have been realised. A major factor in this must be the influence of the buyers; they are, inevitably, the real driver in the whole business. Their conservatism is manifested in a clear preference for buying LNG from a shore-based plant, while that option is still available.
  
  Due to the fact that the LNG liquefaction industry is now very focused on high-capacity plants (5–8 million metric tonnes per annum (MMTPA)), such plants require a processing ‘footprint’ that is well out of scale with feasible FPSOs in order to drive the cost of production down. In other words, it seems that those trying to promote offshore technology in the 1–3MMTPA scale are fighting a losing battle.
  
  This article considers the options open to project developers who seek to develop small-scale LNG production offshore. It explores the political, economic and technical drivers that would be required to successfully realise an offshore development. The article also reviews some of the earlier work in the LNG field, the status of technology development and the likely costs required to realise a pioneer offshore development.

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