The growth momentum in the natural gas industry has gathered steam over the past month, with three project proponents passing major milestones.
The growth momentum in the natural gas industry has gathered steam over the past month, with three project proponents passing major milestones.
Most notably, Royal Dutch Shell formally announced last week it would go ahead with the world’s first floating liquefied natural gas (FLNG) project, off WA’s northern coast, at a cost of about $US12 billion.
That came just a few days after the Northern Territory government granted environmental approval for the Ichthys project, being developed by Japan’s Inpex and France’s Total.
Inpex said it would continue with the federal approvals process and was widely expected to announce a formal go-ahead later this year.
Similarly, Chevron has previously announced that it plans to make a final investment decision on its Wheatstone gas hub development, near Onslow, in the second half of this year.
The cost of the Ichthys and Wheatstone projects are tipped to reach more than $30 billion.
Added to the mix is Woodside, which announced this week it had struck gas at its Xeres exploration well in the Carnarvon Basin, off the coast near Karratha. Woodside needs to find additional gas, via exploration or farm-in deals with other companies, before it can proceed with its Pluto 2 expansion project.
This will be one of the key issues facing Woodside’s new chief executive, Peter Coleman, with the market watching with interest to see if he pulls back from the aggressive growth strategy of his predecessor Don Voelte.
Shell’s revolutionary floating facility involves construction of an LNG plant on a ship that will be about 488 metres long and 75m wide.
The vessel will be moored in water around 250m deep at the gas field, even during cyclones.
“Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop,” executive director Malcolm 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.”
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.”