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OPEC Meeting Could End Without Decision

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Global Energy Advisory - June 15th 2018

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James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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Shell’s Prelude, the World’s Largest Ever Floating Vessel, Hits the Sea

On Tuesday, Shell floated the hull for its industry-changing Prelude floating liquid natural gas (FLNG) vessel, the biggest object ever put to sea.

The hull of the 488 metre long ship being built at the Samsung Heavy Industries' Geoje shipyard in South Korea, has only just been floated off its dry dock for the first time, but in an attempt to consolidate their position in the emerging FLNG market, Shell already has plans for an even larger vessel.

Shell’s engineers have designed a vessel that will dwarf the Prelude in size and durability, allowing it to be anchored off Australia’s northwest coast for 25 years, in what is known as ‘cyclone alley’.

Related article: PetroChina to Buy Exxon Stake in Iraqi Oil Field

Bruce Steenson, the general manager of integrated gas programmes and innovation at Shell, confirmed to Reuters; “yes we will move bigger and move into more extreme environments. We are designing a larger facility ... That will be the next car off the rails.”

Prelude

The Prelude will be anchored about 475 kilometres off the coast of Australia, producing natural gas from below the sea floor, and then chilling it on site to reduce its volume by around 600 times, before loading it onto special LNG tankers for export.

Shell already has another, smaller FLNG vessel in the pipeline to produce LNG from another project off the coast of Australia. Steenson explained that “the Browse structure will be 90 percent the same as Prelude.”

Related article: China Increases Purchases of LNG on Spot Market

If the Prelude and Browse vessels prove to be a success then it could mean that natural gas deposits that are too deep or too small to warrant large scale offshore platforms, could become viable for LNG production.

The Prelude facility will only produce around 3.6 million tonnes of LNG a year, along with another 5.3 million tonnes of liquids and other hydrocarbon fuels, far less than onshore LNG plants. However the newer, larger version of Prelude should have a far higher output, putting it in league with giant land-based facilities, such as the Gorgon LNG plant being built in northwest Australia.

Before settling on Prelude, Shell had looked at building an onshore plant but were put off the idea due to the high costs. The Gorgon site, being developed by Chevron, is running way over budget at around $52 billion, whereas analysts estimate that Prelude will only cost $10.8 - $12.6 billion.

By. James Burgess of Oilprice.com



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