A couple of artist impressions of Shell's proposed Prelude floating LNG project. AS the likes of Woodside Petroleum and Royal Dutch Shell grapple with the technical challenges and political fallout from their floating liquefied natural gas project proposals, Australia's juniors are beginning to eye the opportunities that could flow from a broader rollout of the revolutionary technology. FLNG to date has been a topic of intense debate, with West Australian Premier Colin Barnett questioning whether the country's best interests are served by embracing technology that in theory generates fewer Australian jobs than traditional onshore LNG plants. But within the industry there is a growing acceptance that FLNG has a key role to play in the future of Australian oil and gas. For those in the industry with a longer memory, the present debate over FLNG is similar to that seen in the 1970s when the first floating production, storage and offloading vessels, or FPSOs, were being developed. The FPSOs promised to change the way the offshore oil industry worked, allowing oil to be processed and shipped at sea and removing the need for pipelines between oil fields and their markets. Despite the concerns of governments that such a technology could negate the need for investment in infrastructure and local jobs, the FPSO has become commonplace in the oil and gas industry worldwide. They are used by oil and gas companies big and small, with many juniors contracting the vessels to aid in the development of fields that otherwise would be too small and too remote to exploit. Kevin Gallagher, managing director of oil and gas contractor Clough and former head of the North West Shelf project, says he sees the parallels between the rise of FPSOs and the present concern about the impact of FLNG. "It reminds me of the late 1970s, when the floating oil production facilities were first coming on the scene, and the concerns and the issues raised then were quite similar to what they are today for floating LNG," Mr Gallagher said. You go forward to today and I think there are some 10 offshore oil production vessels operating around Australia, producing oil from fields that wouldn't have been developed without that technology. That's had a really positive impact for a number of years on the Australian economy and it's created a number of jobs in the production and operations environment, as well as maintenance. While FPSOs have proved effective in unlocking opportunities for smaller oil and gas companies, FLNG to date has been a plaything largely for the biggest names. Royal Dutch Shell was the first to approve construction of an FLNG vessel, with the first of the five ships it has ordered under construction at a shipyard in South Korea. That first vessel will service Shell's Prelude field off northern Western Australia, while Shell has also earmarked FLNG for use in the development of the Browse and Sunrise gasfields, also off northern Australia. Malaysia's state-owned oil and gas giant Petronas is also well down the FLNG path, having commissioned some smaller vessels for stranded fields off the Malaysian coast. Despite having made the investment decision after Shell, Petronas's first FLNG facility is expected to begin production before Shell's. The multi-billion-dollar budgets and intense research and development needs haven't stopped smaller companies from assessing the possible implications of FLNG for their own projects. Melbourne-based Nexus is committed to using FLNG for its Crux development in the Timor Sea, having secured Shell as a major partner in the project. It also hopes to develop its Echuca Shoals field through FLNG. Nexus managing director Lucio Della Martina says the fundamental economic advantages of FLNG over traditional land-based plants will help Australia's LNG industry to continue to grow in the face of increased competition from other countries. We now have the opportunity to take hold of this new technology and enable the development of resources that would otherwise be stranded. This will enable us to compete," Mr Della Martina told The Australian. The other way is to continue to wait for onshore LNG technology to improve and for costs to come down. The issue there, though, is if all the other competitors start picking up market share in Japan, by the time you're ready to roll the market isn't there. Geoffrey Cann, national director of oil and gas in Deloitte's Brisbane office, is certain that FLNG technology will become more and more accessible for smaller companies. He notes that Belgian-based shipping group Exmar is pushing in Canada for the deployment of its own smaller FLNG vessels, which are on a scale likely to be of greater appeal to the minnows of the oil and gas sector. Rather than resist the push for FLNG, Mr Cann says state and federal governments in Australia should be trying to position the country as a global hub for the new technology. It seems to me like the age of cheap floating LNG facilities is here. They are being built, the demand for gas is basically unlimited, there are gasfields all over the planet that can't get to market, and Australia has options to get into this in a very big way," he said. You can build one more plant at James Price Point (the site of the now-scrapped plan for an onshore LNG plant servicing the Browse project) or you can be an industry leader in floating technology and exploit that all over the world. Where would you rather be?