In Australia, Shell signals new era for LNG

Arrival of a floating production facility comes as the Australian government warns exports could be limited to keep the domestic market well supplied.
By Daniel J. Graeber  |  July 25, 2017 at 5:58 AM
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July 25 (UPI) -- The arrival of a floating liquefied natural gas facility off the coast of Australia signals a milestone for the region as an energy hub, Royal Dutch Shell said.

The company's Prelude vessel, its first-ever floating platform for LNG, arrived off the coast of Western Australia, after leaving its South Korean shipyard in late June.

Large for a floating facility, it's one-quarter the size of an equivalent inland plant. With LNG emerging in market share because of its diverse deliverability options, Shell said the Prelude FLNG vessel opens up new doors in new countries.

For Australia, the company said the vessel will keep 260 local workers on board and create more than 1,500 jobs during the commissioning phase.

"Prelude's arrival is a clear demonstration of Shell's long standing commitment to investment and development in Australia - delivering significant economic benefits to the nation," Zoe Yujnovich, the company's regional head, said in a statement.

The vessel will allow Shell to pull natural gas from seven production wells at the Prelude field off the coast of Western Australia. At 3.6 million tons of LNG expected each year, the facility can process an amount equivalent to Hong Kong's entire demand for natural gas. At 1,600 feet long by 240 feet wide, it's the largest offshore facility of its kind ever built.

Yujnovich added that the arrival of Prelude signals a new era for the country's LNG export industry.

Earlier this week, Sen. Matt Canavan, the natural resources minister for northern Australia, said LNG producers were given formal notice that 2018, the same year Prelude starts production, could be a year that would trigger a domestic natural gas security initiative.

"The mechanism enables the Australian government to take action to secure domestic gas supply because of its importance to the Australian economy, at the same time bearing in mind the gas export industry's long-term viability," he said in a statement.

The measure gives the government the right to intervene and limit exports in order to keep the domestic market adequately supplied.

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