Shell Resumes Prelude LNG Operations in Time for Peak Winter

Shell has restarted operations at its floating LNG production platform Prelude offshore Australia and is expected to see the first cargo after extensive maintenance load within days, Reuters reported on Monday, citing industry sources.

The return to service of the large floating LNG production platform coincides with peak winter demand in the northern hemisphere and Shell – if everything goes to plan – could take advantage of winter natural gas demand in north Asia.     

So far into the heating season, natural gas demand in both Asia and Europe has been tepid, due to high inventory levels and weaker consumption due to milder weather and a slowdown in European industrial activity.

Early into the maintenance period for Shell’s Prelude, reports emerged in September that Shell had abandoned plans to have the Prelude platform out for a year for a major overhaul and had chosen instead a quicker maintenance period of several months, as it looks to take advantage of strong gas demand.

Instead of a year-long turnaround, the plant was set to undergo a much shorter maintenance period, to be up and running for the winter gas demand in North Asia, industry sources with knowledge of the plans told Reuters in early September.

Prelude FLNG – the world’s largest floating liquefied natural gas facility – has been plagued by issues since shipping its first LNG cargo in June 2019.

In May this year, Shell halted production at Prelude LNG due to a trip.

Between July and September last year, production and exports at Prelude LNG were disrupted due to industrial action at the facility as trade unions demanded higher wages.

After the pay dispute was settled, Shell had to shut down Prelude LNG again at the end of 2022 due to a fire that occurred on December 21. A small fire was detected on board Prelude in a turbine enclosure. While the fire was quickly contained using a hand-held extinguisher, and there were no injuries, production at the facility was shut down again. Prelude LNG resumed output around a month after the incident.

By Charles Kennedy for Oilprice.com

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