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Unlocking the supply chain for LNG project success

Unlocking the supply chain for LNG project success

LNG developers are facing the challenges of lower oil and gas prices, and consequent reductions in capital expenditure, along with more remote and challenging projects. To ensure that new LNG projects are viable, and to extract maximum value from existing projects, proponents and operators have to unlock their supply chain. LNG supply chains are experiencing three major challenges, namely the size and complexity of these projects; the remoteness and other challenges (for instance political and environmental) of the new wave of projects; and the construction of multiple plants in contiguous locations, leading to bottlenecks and sharply-rising costs of labor and materials.


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Ten ways to address these challenges include:

  1. Put human resources first
  2. Adapt learning from other industries
  3. Collaborate with other operators
  4. Re-think contractual relationships with suppliers
  5. Prepare for environmental, ethical and local content supply chain requirements
  6. Unlock the potential of modularization
  7. Consider floating LNG (FLNG)
  8. Understand the local environment
  9. Foresee the handover to operations
  10. Adapt maintenance policy to location.

Appropriate use of these approaches can cut costs, reduce construction times, speed start-up and cut environmental impact. In a world in which the economics of new LNG ventures are seriously challenged, projects with the most competitive supply chains have the best prospects for going ahead successfully. 





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