Prelude FLNG Terminal

From Global Energy Monitor
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Prelude FLNG Terminal, also called Crux FLNG, is an LNG terminal in Western Australia, Australia.

Location

The terminal is located 475 km northwest of Broome, Western Australia.[1]

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Project Details

  • Owner:
  • Parent: Shell (67.5%), Inpex (17.5%), CPC (5%), Kogas (10%)
  • Location: Browse Basin, Western Australia, Australia
  • Coordinates: -15.2539252, 123.5381736 (exact)
  • Capacity: 3.6 mtpa, 0.52 bcfd
  • Status: Operating
  • Type: Export
  • Start Year: 2018

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Prelude Floating LNG Terminal is an offshore LNG terminal under development in Western Australia, Australia.[2] Its close neighbor is Inpex-owned Ichthys LNG Terminal.[3]

Prelude is longest vessel ever built. It is 1,601 feet (488 meters) long and weighs about 600,000 metric tons.[4]

Construction on Prelude began in late 2012.[4]

The facility had announced legally binding buyer agreements.[5]

As of early 2017 Prelude was still under construction.[5] In June 2017 Prelude left the yard in South Korea, towed to Australia to be chained to the ocean floor off Australia. The first cargo of fuel is likely by mid-2018.[4]

Reuters reported in October 2017 that Wheatstone LNG Terminal in Western Australia is the sixth out of eight projects in a $200 billion Australian LNG construction boom with two more facilities to be launched. The two remaining are Shell’s Prelude Floating LNG Terminal and Ichthys LNG Terminal owned by Japan's Ichthys.[6]

The terminal began commercial operations in December 2018.[7] After a series of safety incidents in late 2019 and early 2020 the terminal was shut down in February 2020 and remained shut down as of April 2020.[8]

In April 2020, Shell announced that it was delaying a final investment decision, originally planned for 2020, on its Crux gas field in offshore Australia due to the economic downturn resulting from the COVID-19 pandemic. The Crux project, also part owned by Osaka Gas, is intended to supply backfill gas to the Prelude facility.[9]

In June 2020, and with operations at Prelude still frozen, growing scepticism emerged from global banking analysts about the vastly expensive project's economic feasibility. One assessment from Goldman Sachs reckons the project to be the world’s most expensive new LNG project with a “commercial break even” cost of almost $20 per thousand cubic feet. On this estimate, Prelude's material costs are more than double LNG from other new projects and four times the cost of LNG produced in Qatar, the world's LNG leader.[10]

A further setback for the Prelude project took place in September 2020 when it was reported that Shell's efforts to bring the terminal back into production had been thwarted by a failed gas seal just days after the company had opened subsea wells for the first time in seven months. The seal's failure did not cause gas to escape but Shell was forced to stop gas flow as a precaution.[11] In October 2020, Shell said that it did not expect full production at Prelude to happen before the end of the year and that it hoped to resume shipping in the first quarter of 2021. This will mean a full year of fixing problems at the floating terminal instead of producing.[12]

In January 2021, LNG cargo shipments resumed at Prelude.[13]

Natural Gas in Australia

As of 2017, Australia is the second largest LNG exporter after Qatar. The country exports almost 44 million tons a year.[14]

Prelude may position Australia to overtake Qatar as the world's biggest exporter of the fuel in the coming years.[4]

Articles and resources

References

  1. PRELUDE FLNG MARINE TERMINAL, Shell Australia, accessed March 2019
  2. Prelude Floating LNG Terminal, Wikipedia, accessed April 2017
  3. Kate Wild,"NPEX joint venture seeks to dump $30 million of federal environmental projects" ABC News, March 30, 2016.
  4. 4.0 4.1 4.2 4.3 Robb M. Stewart, "Why Has BC’S LNG Industry Stalled?," Sightline, June 28, 2017.
  5. 5.0 5.1 "2017 World LNG Report" International Gas Union, Accessed June 20, 2017.
  6. Sonali Paul, Henning Gloystein, "Chevron starts LNG output at Australia's Wheatstone, first cargo expected in weeks," Reuters, October 8, 2017.
  7. Shell kicks off production at Prelude FLNG, Offshore Energy, Dec. 26, 2018
  8. Prelude floating LNG giant still offline after two months, Upstream Online, Apr. 2, 2020
  9. Shell and partners delay decision on Australia's Crux gas project, Reuters, Apr. 7, 2020
  10. Tim Treadgold, "Shell’s $12 Billion LNG Experiment Becomes A Big Headache,", Forbes, Jun. 23, 2020
  11. Peter Milne, "Leak sets back Shell’s restart of Prelude LNG,", Boiling Point, Sep. 7, 2020
  12. Sonali Paul, "Shell's Australian Prelude LNG will not resume shipping LNG this year,", Reuters, Oct. 15, 2020
  13. Kevin Morrison, "Australia's Prelude FLNG shipments resume: Shell,", Argus, Jan. 11, 2021
  14. Qatar Moves to Ensure LNG Dominance, Arab Gulf States Institute in Washington, April 17, 2017.

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External resources

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