The first LNG shipment has sailed from the world’s largest marine facility anchored off WA’s North West, reports the Sydney Morning Herald.
What is it?
Shell’s 488m-long floating LNG facility Prelude transferred its first shipment of LNG to Spanish ship the Valencia Knutsen on Monday before it left the facility on Tuesday, bound for Shell’s customers in Asia.
The milestone comes about eight years after Shell committed to the project with its joint venture partners and two years after Prelude arrived in WA.
How did it went?
Shell integrated gas and new energies director Maarten Wetselaar said the departure went safely.
Shell’s Outlook of Prelude
“Prelude forms an integral part of our global portfolio and plays an important role in meeting the growing demand for more and cleaner energy for our customers around the world,” he said.
Shell Australia chairwoman Zoe Yujnovich said Prelude combined human endeavour and ingenuity from across the globe and Australia.
How crucial this is?
Prelude was expected to produce 3.6 million tonnes per annum (mtpa) of LNG, 1.3mtpa of condensate and 0.4mtpa of LPG.
Wood Mackenzie energy analyst Daniel Toleman said Australia was on track to export more than 80 million metric tonnes per annum of LNG, which surpassed Qatar as the largest LNG producer in the world.
He said how fast Prelude delivered its second and third cargo, and ramped up output would be a key indicator of its success.
“Shell will be keen to ramp up to full production quickly to counteract any reserves impact from the already producing and connected Ichthys field,” he said.
Investment Decisions Depending on this
“The Prelude facility will be backfilled by Crux [gas field], which entered front end engineering and design this year. We expect a final investment decision late next year with first production in 2025.”
“In addition, later this year Shell will spud the Bratwurst exploration well. If a significant gas resource is discovered it is likely these volumes will be developed via the Prelude facility.”
Marking the End of Australian Greenfield
Mr Toleman said the completion of Prelude marked the end of the Australian greenfield, or new project, LNG boom but the next investment cycle was already in sight, with backfill projects – Scarborough, Barossa, Browse, Arrow and Crux – vying for final investment decisions.
A 2014 WA parliamentary inquiry found floating LNG facilities raised particular challenges to WA, due largely to “limited opportunities available to local content providers.”
It also found floating LNG generated less income for the state than processing the same fields using onshore processing.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!