Shell Restarts Prelude FLNG Project
Giant gas project off Australia had been idle since last December.
Shell has restarted the shipment of LNG from its multibillion-dollar Prelude FLNG facility off northwest Australia after being sidelined since 2 December 2021 due to significant power issues. The first cargo since late last year left the project site on 10 April, according to the company.
Its restarted operations should provide some relief to term off-takers in South Korea and Japan, Rystad Energy wrote in a market note. "Spot buying interest from South Asia has been very robust over the past few days with several cargos being awarded around the $30 mark."
The Prelude FLNG facility suffered a fire and lost power in December. Shell was unable to restore reliable power supply after a reported 3 days of attempts.
Shell was permitted to resume operations last month after convincing the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) that power problems had been resolved.
Local news outlets in Australia saw the NOPSEMA investigation report, which found the power issues could have resulted in “catastrophic failure” of parts of the ship due to the lack of cooling of its substructure, which could have jeopardized the support of the ship’s topsides.
The centerpiece to the $24-billion Prelude project is the 488-m-long FLNG vessel moored some 475 km off the Australian coast. The floater has capacity to produce 3.6 mtpa of LNG in addition to condensate and LPG.
The 4-month shutdown was just the latest in a string of setbacks since its delayed startup in 2019.
Prelude is co-owned by operator Shell and partners Inpex, Korea Gas,-and a subsidiary of Taiwan's state-run Chinese Petroleum Corp.