Shell approves floating LNG project in Australia
The executive board of Royal Dutch Shell has made its final investment decision on the Prelude floating liquefied natural gas (FLNG) project in Australia, opting to build the world's first FLNG facility, company officials said on Friday.
Moored far out to sea, some 200 kilometres from the nearest land in Australia, the FLNG facility will produce gas from offshore fields, and liquefy it onboard by cooling.
The decision means that Shell is now ready to start detailed design and construction of what will be the world's largest floating offshore facility, in a ship yard in South Korea.
From bow to stern, Shell's FLNG facility will be 488 metres long, and will be the largest floating offshore facility in the world - longer than four soccer fields laid end to end, the company said.
When fully equipped and with its storage tanks full, it will weigh around 600,000 tonnes - roughly six times as much as the largest aircraft carrier. Some 260,000 tonnes of that weight will consist of steel - around five times more than was used to build the Sydney Harbour Bridge.
"Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop," said Malcolm Brinded, Shell's upstream executive director.
"Our decision to go ahead with this project is a true breakthrough for the LNG industry, giving it a significant boost to help meet the world's growing demand for the cleanest-burning fossil fuel."
Brinded continued: "FLNG technology is an exciting innovation, complementary to onshore LNG, which can help accelerate the development of gas resources".
The facility has been designed to withstand the severest cyclones - those of Category 5. Ocean-going LNG carriers will offload liquefied gas, chilled to minus-162 Celsius and shrunk in volume by 600 times, and other products, directly from the facility out at sea for delivery to global markets.
Until now, the liquefaction of offshore gas has always involved piping the gas to a land-based plant.
Shell has progressed with the Prelude FLNG project at a rapid pace, it said, with first production of LNG expected some 10 years after the gas was discovered.
The FLNG facility will tap around 3 trillion cubic feet equivalent of resources contained in the Prelude gas field. Shell discovered the Prelude gas field in 2007.
Some 110,000 bpd of expected production from Prelude should underpin at least 5.3mn tones/year of liquids, comprising 3.6mn tones/year of LNG, 1.3mn tonnes/year of condensate and 400,000 tonnes/year of liquefied petroleum gas.
The FLNG facility will stay permanently moored at the Prelude gas field for 25 years, and in later development phases should produce from other fields in the area where Shell has an interest, the company said.
Ann Pickard, country chair of Shell in Australia, said: "This will be a game changer for the energy industry. We will be deploying this revolutionary technology first in Australian waters, where it will add another dimension to Australia's already vibrant gas industry."
Brinded added: "Beyond this, our ambition is to develop more FLNG projects globally. Our design can accommodate a range of gas fields, and our strategic partnership with Technip and Samsung should enable us to apply it progressively faster for future projects. We see opportunities around the world to work on other FLNG projects with governments, energy companies and customers."
The Prelude FLNG project will be the first Australian upstream project in which Shell is the operator. Australia is one of Shell's key growth provinces, and Shell's upstream investment in Australia should reach some $30 billion over the next five years, including the Prelude and Gorgon projects, and on-going exploration and feasibility studies in the country, officials said.
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