Production on Shell’s flagship Prelude floating liquefied natural gas vessel offshore Australia has been halted again, this time because of protracted work to rule action by unionised workers on board the asset which has banned the offtake of cargoes.
A Shell spokeswoman confirmed to Upstream: "Production on the Shell-operated Prelude FLNG facility has been temporarily suspended due to work bans currently in force under protected industrial action by members of the Australian Workers’ Union and Electrical Trades Union (ETU) that prohibit offtake activities.
“Until the bans on the offtake of cargoes are lifted and the plant can be safely restarted, staff required to perform safety-critical functions will remain on board while all other workers will be demobilised.”
Offshore Alliance — a partnership of the Australian Workers’ Union and the Maritime Union of Australia — and ETU members are now into their 33rd day of protected industrial action on the Prelude FLNG.
“Members are fighting for job security, transparent level progression within their classification structure, Tier 1 remuneration rates, and fair and effective dispute resolution procedures,” said the OA.
“Shell's incompetent and dysfunctional management of industrial relations is a self-inflicted mess which clearly needs to be resolved by their senior management.”
On Monday around 95% of the Prelude FLNG workers rejected a proposed enterprise agreement and moved to ratchet up their protected industrial action.
The OA said that its latest ballot is a step on the road for the union after it locked in additional work bans which could extend to the scheduled Prelude turnaround in September.
“The way Shell are going, they may as well cancel the flotel,” the union said in a Facebook post.
The protected industrial action is set to continue escalating in the coming weeks with additional work bans to be imposed — the existing work to rule runs until 21 July.
“Shell recognises the entitlement of all workers to exercise their rights, including the right to participate in industrial action. The safety and welfare of people on our sites remain our highest priority,” added the spokeswoman for the UK supermajor.
Catalogue of problems
Shell’s Prelude FLNG has been plagued by various technical, safety and personnel-related issues since arriving on location in July 2017.
Production start-up was eventually achieved in late 2018 and the first cargo shipped in June 2019.
A technical glitch then saw the unit being taken offline from February 2020 until January 2021.
The FLNG vessel reportedly shipped its last cargo over the past weekend, after boosting the vessel’s production up to more than 90% of the nameplate 3.6 million tonnes per annum of LNG after workers onboard had relaxed their ongoing industrial action, reported Reuters.
Shell had only restarted shipments from the Prelude FLNG in April after a shutdown lasting more than four months.
The unit on 2 December 2021 lost power completely, then had unreliable and intermittent power for three days.
Essential services including lighting, safety systems, communications, potable water systems, sewage treatment and air conditioning were affected and seven people were treated for heat-related conditions.
On 23 December, Australia’s regulator, the National Offshore Petroleum Safety & Environmental Management Authority, instructed Shell to “undertake an investigation and create a plan, schedule and commitment to take all necessary corrective actions and demonstrate that the facility can operate safely in the event of power loss before production can commence”.
Prelude FLNG has a nameplate production capacity of 3.6 million tpa of LNG, 1.3 million tpa of condensate and 400,000 tpa of liquid petroleum gas.
Shell operates the floater with a 67.5% interest on behalf of co-venturers Inpex on 17.5%, Kogas with 10% and CPC having 5%.
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