NGI The Weekly Gas Market Report / NGI All News Access

Shell to Deploy Floating LNG Offshore Australia

Royal Dutch Shell plc will use its floating liquefied natural gas (FLNG) technology to develop its Prelude and Concerto gas discoveries in the Browse Basin off the northwest coast of Western Australia, the company said last week.

FLNG offers the ability to process gas in situ over an offshore gas field, reducing project costs and the environmental footprint of an LNG development, Shell said.

Shell is the operator and 100% equity holder of the WA-371-P permit, containing the Prelude and Concerto fields, which would be developed sequentially. While pending a final investment decision, the Prelude FLNG Project is now in the front end engineering and design (FEED) phase of development. FEED for Prelude is being undertaken as part of Shell's contract with a Technip-Samsung Heavy Industries consortium for the design, construction and installation of multiple FLNG facilities.

"Shell is excited to be progressing with FLNG technology, which has the potential to unlock some of Australia's 'stranded' gas reserves that have previously been considered uneconomic to develop because of their small size or distance from shore," said Malcolm Brinded, Shell executive director for upstream international. "FLNG technology adds to Shell's LNG leadership -- we are already the largest LNG marketer amongst the international oil companies and are technical advisor to many of the world's LNG facilities."

The Prelude FLNG facility is expected to have the capacity to produce around 3.5 million metric tons per annum (MTPA) of LNG, as well as condensate and LPG, a Shell spokesperson told NGI. "Talking generally, our FLNG concept is ideally suited for larger fields (about 2 to 10-plus Tcf), with high production rates (about 3.5 MTPA, 600MMcf/d). It is generally more suitable for more distant offshore fields, and is designed to process a wide range of gas compositions.

"No sales commitments have been made for Prelude yet, but we expect to sell LNG from the Prelude FLNG Project into Shell's portfolio of customers in Asia. This could mean that Prelude LNG could be sold to any number of Shell's customers in the region."

Prelude was discovered in 2007 and Concerto was discovered in late March. Shell said it is working on the environmental and production approvals for the Prelude FLNG Project, with the environmental impact statement soon to be released for public comment.

This past summer Shell Gas & Power Developments BV signed a master agreement with the Technip and Samsung consortium (see NGI, Aug. 3).

A number of FLNG designs have been developed by various parties (see NGI, April 21, 2008).

"Shell is looking closely at a number of potential FLNG development concepts globally, but no firm decision has been taken on any other project besides Prelude," the spokesperson said.

©Copyright 2009 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus