Energy giant Royal Dutch Shell announced today it will go ahead with the world's first floating liquefied natural gas project, off WA's northern coast, at a cost of approximately US$12 billion.
Energy giant Royal Dutch Shell announced today it will go ahead with the world's first floating liquefied natural gas project, off WA's northern coast, at a cost of approximately US$12 billion.
The go-ahead adds to the surge in investment in the LNG sector in Australia's north-west, with approval also expected this year for Japanese group Inpex's Ichthys project and Chevron's Wheatstone project.
Shell did not confirm the cost or the start-up date for the Prelude project, but executive director Malcolm Brinded gave strong hints at a press conference in Perth today.
He said LNG projects typically cost $3 billion to $3.5 billion per million tonnes of output.
With Prelude having LNG output of 3.6 million tonnes, that equates to a cost of between US$10.8 billion and US$12.6 billion.
Mr Brinded also said production would commence about 10 years after the gas was discovered, which means about 2017.
According to Shell, the floating facility will be about 488 metres long and 75 metres wide, and will be moored in water around 250 metres deep at the gas field during production, even during cyclones.
Around 260,000 tonnes of steel will be used in its construction, five times more than was used to build the Sydney Harbour Bridge.
The vessel, which will produce about 3 trillion cubic feet equivalent of gas resources in total, will measure 17-storeys high from the waterline.
"Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop," Mr Brinded said.
"Our decision to go ahead with this project is a true breakthrough for the LNG industry, giving it a significant boost to help meet the world's growing demand for the cleanest-burning fossil fuel."
"FLNG technology is an exciting innovation, complementary to onshore LNG, which can help accelerate the development of gas resources."
Shell Australia chair Ann Pickard said the vessel would be a game changer for the energy industry.
"We will be deploying this revolutionary technology first in Australian waters, where it will add another dimension to Australia's already vibrant gas industry," she said.
Mr Brinded said Shell's ambition was to develop more floating LNG projects globally.
"Our design can accommodate a range of gas fields, and our strategic partnership with Technip and Samsung should enable us to apply it progressively faster for future projects.
"We see opportunities around the world to work on other FLNG projects with governments, energy companies and customers."
