LNG

Floating liquefied natural gas (FLNG) terminals gain traction with global capacity set to reach 42 mtpa by 2030, climbing to 55 mtpa by 2035 – almost four times the 14.1 mtpa recorded last year, research from Rystad Energy finds.

Shell has again suspended production at the “Prelude” floating LNG facility offshore northwest Australia because of an electric trip, an issue that had previously led to long shutdowns for safety investigations.

Shell Australia said liquefied natural gas cargo exports from the “Prelude” floating LNG production facility offshore northwest Australia will be halted at least until mid-July because of an industrial dispute with unions.

The Shell-operated FLNG vessel is moored 400 kilometres (249 miles) north of the town of Broome on Western Australia’s Kimberley coast and has 3.6 million tonnes per annum of capacity.

The dispute is with trade unions represented by the Offshore Alliance comprising the Australian Workers’ Union and the Maritime Union of Australia and centres around stalled negotiations on a new collective agreement.

The Australian energy safety authorities had only allowed the “Prelude” FLNG plant to re-start in April 2022 after being shut in December 2021 after the latest in a series of incidents in an electrical utility on board.

The “Prelude”, which came on stream in 2019, generally has around 200 or so crew on board at the one time.

A Shell Australia spokesperson said the company had notified LNG customers that it was cancelling cargoes until at least the middle of July due to the impact of the industrial action.

The unions for workers on board the “Prelude” said they had failed to make progress on several outstanding issues in negotiations with Shell.

Shell added that it had cancelled the change-over of workers due to fly to the vessel as a result of bans introduced by union members.

Restrictions

Workers have said there would be restrictions including signing permits at certain times between July 1 and July 7, a ban on restarting processor compressors and steam turbine generators that have tripped and a ban on refuelling helicopters or unloading certain cargoes.

The unions added that the work stoppages would also affect the mooring of LNG carrier alongside the “Prelude” to lift cargoes at certain hours of the day.

The “Prelude” joint venture is owned 67.5 percent by Shell and 17.5 percent by Inpex Corp. of Japan, operator of the Australian Ichthys project near Darwin in the Northern Territory.

A further 10 percent of Prelude is held by LNG buyer Korea Gas Corp. and 5 percent by CPC Corp. of Taiwan.

Shell and its partners recently took a final investment decision to proceed with the Crux natural gas field joint venture offshore Western Australia to provide more feed gas for the “Prelude”.

The project has its key regulatory approvals and these include a production licence from the National Offshore Petroleum Titles Administrator.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has also accepted the Crux offshore project proposal.

Resources from the Crux gas field will mean “Prelude” FLNG receiving up to 550 million standard cubic feet of gas per day.

Shell Australia Chairman Tony Nunan had said at the time that developing the Crux project reinforces the company’s commitment to Australia, including boosting the regional economy, creating jobs and providing training opportunities.

The Australian energy safety authorities have ordered the closure of the “Prelude” floating liquefied natural gas production plant offshore northwest Australia after the latest incident in an electrical utility on board and reported on December 2.

The Shell-operated FLNG vessel is moored 400 kilometres north of the town of Broome on Western Australia’s Kimberley coast and has 3.6 million tonnes per annum of capacity.

The Australian National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) issued the order for a deeper safety probe by Shell.

This means Shell will likely be halting the offloading of LNG cargoes from “Prelude” into 2022 while the unreliable power shutdown issues are investigated .

The direction from NOPSEMA means the FLNG hull, the largest in the world, will be off stream until Shell can convince the regulators that the problem has been permanently fixed.

NOPSEMA has directed Shell to review what happened on the Prelude between December 2 and 6 and then develop a detailed plan to implement “all necessary corrective actions.”

Shell must also provide NOPSEMA with monthly reports on its progress from early March 2022.

Onboard inspectors

Shell must additionally convince the safety regulator that it can safely recover essential power and other services after a power outage alarm sounds.

“The failure to restore reliable power was seen to represent an ongoing impact and risk to the health and safety of the personnel on the facility,” said the NOPSEMA statement.

After visiting the 488m-long vessel NOPSEMA inspectors concluded that Shell “did not have a sufficient understanding of the risks of the power system on the facility, including failure mechanisms, inter-dependencies and recovery” mechanisms.

According to Shell, smoke triggered the automatic fire detection and management systems in the early December incident and an evacuation of most of the 200 or so crew on board was started. All workers on the facility were accounted for and no injuries reported.

The Shell facility was previously shut down for 11 months after electrical issues. Operations only resumed in February 2021 following an “electrical trip” in early 2020 and three incidents which NOPSEMA had described at the time as “dangerous occurrences”.

For the Shell project, the Concerto gas field and the nearby Prelude field, with combined resources of around 3 trillion cubic feet, are providing the feed gas to produce the LNG.

The Prelude joint venture is owned 67.5 percent by Shell and 17.5 percent by Inpex Corp. of Japan, operator of the Australian Ichthys project.

A further 10 percent of Prelude is held by LNG buyer Korea Gas Corp. and 5 percent by CPC Corp. of Taiwan.

Australian energy safety authorities will launch an investigation into the cause of a fire that has shut down Shell’s floating liquefied natural gas production vessel, “Prelude”, deployed offshore northwest Australia after an incident in which no one was reported hurt.

TechnipFMC, the French-US energy and subsea engineering company, posted lower third-quarter revenues and income as its work was almost completed on two of the world’s most difficult LNG projects. Prelude FLN offshore Australia and the Yamal LNG plant in Arctic Russia.

Royal Dutch Shell said a new era had opened for the LNG industry as its “Prelude” floating production hull arrived in Australian waters after being towed from the shipyard in South Korea.

Inpex Corp. also celebrated the sail away from the shipyard in South Korea towards Australia of Shell’s “Prelude” floating LNG project hull because of its shareholding in the joint venture.

The Royal Dutch Shell floating LNG hull for the Prelude project offshore northwest Australia has left its South Korean shipyard under tow and is bound for Australian waters.

EnerMech of the UK has been awarded a pre-commissioning subcontract by Technip Oceania, part of TechnipFMC, on the Royal Dutch Shell Prelude floating LNG project under development for offshore northwest Australia.