• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days The United States produced more crude oil than any nation, at any time.
  • 7 days How Far Have We Really Gotten With Alternative Energy
  • 10 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 9 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 10 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
Gas Glut? Not for Long.

Gas Glut? Not for Long.

Low prices invariably stimulate stronger…

Natural Gas ETFs Among The Worst Performing Equities

Natural Gas ETFs Among The Worst Performing Equities

Exchange-traded funds (ETFs) that track…

The World Faces A Natural Gas Glut Not Seen in Decades

The World Faces A Natural Gas Glut Not Seen in Decades

WoodMackenzie: Gas prices in Europe…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Shell Restarts Production At Huge Prelude Project As LNG Prices Soar

Prelude

Shell has restarted production of liquefied natural gas at its Prelude offshore project in Australia after almost a year's suspension.

"LNG cargoes have resumed from Shell's Prelude FLNG facility," Argus reported, citing a company statement.

The restart of the 3.6-million-ton facility comes at the best possible time. A cold spell in China has pushed LNG prices to the highest in years, erasing worry about an oversupplied market as Chinese buyers struggle to stock up on the fuel.

Prelude was planned as a flagship floating LNG project for the Anglo-Dutch supermajor. Like most other large-scale offshore LNG projects, however, it ran into delays and cost overruns. Shell and its peers have recently been forced to cancel other LNG projects as the competition is fierce. It resigned itself to focusing on the ones already in operation.

When Prelude stopped pumping gas last February, there was concern that the project, estimated to have cost anywhere between $9.25 billion (A$12 billion) and $131 billion (A$17 billion) to build, may flop as its breakeven price was estimated by analysts at $20 per 1,000 cu ft of natural gas, versus prices of $2-3 per 1,000 cu ft, according to the U.S. Energy Information Administration and Henry Hub price updates.

"Prelude has been a 'white elephant' — we always felt it was a technology looking for a solution rather than the other way round," Bernstein analyst Neil Beveridge told the Financial Times in comments on the restart of the facility.

The intention may have been to develop a technology that can then be used to build many such facilities, as another analyst, Saul Kavonic, told the FT, but it ended up the wrong way round.

"The industry FLNG ambition to 'design one build many' has unfortunately become 'design many build one' in some quarters following disappointing project execution," Kavonic told the FT. "Only more modest niche applications are now seen as plausible."

By Irina Slav for Oilprice.com

ADVERTISEMENT

More Top Reads from Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • George Doolittle on January 11 2021 said:
    Easier mess to clean up than a nuclear power plant. "Sunk capital" it is true can be only estimated and "made true" only once the "object" starts producing cash flow and indeed free cash flow.

    Clearly there are massive energy and indeed food shortages in China at the moment.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News