Kogas writedown offers Prelude detail

Kogas wrote down its 10 per cent stake in Prelude FLNG by $US361 million last year, as it reported a $US 304 million loss from the operation.

Kogas Prelude is a subsidiary of South Korean company Kogas, which bought the stake in 2012.

Prelude was the second floating LNG platform to enter production globally and is operated by Shell, which owns a 67.5 per cent share.

The vessel commenced shipments in June last year.

The Kogas Prelude entity earned $US37.8 million revenue in 2019, according to the annual report.

It sold 1 LNG cargo, 2 LPG shipments and 4 condensate shipments during the calendar year.

But the cost of goods sold was $US56.5 million, leading to a gross loss of $US18.7 million.

Kogas Prelude took a $US361 million impairment, and reported non-current assets were now $US 1.5 billion.

The entity also claimed a deferred income tax benefit of $US106 million.

This year

Other Prelude partners have taken impairments in recent months.

Shell reportedly cut the value of its global gas assets by about $US 8 billion in July, including Prelude.

Inpex announced a writedown of its 17.5 per cent stake in Prelude by ¥130.8 billion ($1.7 billion) in August.

That was driven by the low oil price, the company said.

Prelude was out of action for more than six months with problems in power generation and plumbing.

Industrial disputes have also been a frustration.

Catering workers employed by contractor Sodexo had been striking earlier this year; most employees in that dispute are on the Prelude platform.

Maintenance workers employed by Monadelphous subsidiary M&ISS had also been balloted for industrial action.

Both are represented by the Offshore Alliance, a joint effort by the Maritime Union of Australia and Australian Workers’ Union.

Separately, Woodside Petroleum wrote down the value of six of its oil and gas production assets in July.

That impairment was $US2.8 billion.