SHELL has resumed production of LNG from its huge floating processing plant – Prelude – following a series of project setbacks that halted output for almost a year.
The oil major said this week: “LNG cargoes have resumed from Shell’s Prelude FLNG facility.”
Shell repeated the statement it has made in response to a series of setbacks at the project, which at 488 m long is the largest ship ever built: “Prelude is a multi-decade project, and our focus remains on delivering sustained performance over the long-term.”
Production aboard Prelude was halted in February after an electrical trip. This fault followed, though was not linked to, an order from Australia’s National Offshore Petroleum Safety and Environmental Management Authority for Shell to revise its safety management system after three “dangerous occurrences” onboard that involved loss of containment.
Commenting on the challenges associated with FLNG, analyst Saul Kavonic, a qualified chemical engineer and Head of Energy Research Australia at Credit Suisse, said: “Most of the components that make up FLNG are well understood technologies. One of the primary engineering challenges entails the integration of these components together, amidst ocean conditions including cyclone-prone locations, with great space constraints compared with more traditional LNG projects. The logistics involved is quite a feat.”
Other technical challenges that FLNG projects have faced include contract management and resource quality, Kavonic said. Unfavourable market conditions have also curtailed the oil industry’s ambitions for FLNG. Projects that have been cancelled in recent years include AltaGas’s plans for a floating facility off Canada.
“The industries’ FLNG ambitions are now much more modest in [the] wake of softening LNG market conditions, more competitive land-based LNG projects emerging and FLNG project execution challenges experienced over the last decade. In particular, the ‘mega project’ FLNG proposals are more challenging to pursue as the industry turns to lower cost, lower risk brownfield developments where possible,” Kavonic said.
Shell started operations at Prelude in December 2018, 475 km off the coast of Western Australia. The idea behind FLNG is that a floating plant can be towed to distant or small gas fields from which production would be uneconomical, using conventional piped connections to onshore processing plants. Once the field is exhausted, the ship is towed to another. (January 15, 2021)
AUSTRALIA - LNG - Production