Western Australia’s hard border due to the Covid-19 pandemic is causing delays to the restart of Shell’s Prelude floating liquefied natural gas project, which looks set to remain offline for much of the current quarter.
Prelude has been offline since an electrical fire in December last year resulted in a complete loss of power at the facility, with a subsequent report into the incident suggesting the FLNG vessel was at risk of ‘catastrophic failure’ as a result of the fire and subsequent power outages.
Australia’s offshore regulator the National Offshore Petroleum Safety & Environmental Management Authority (Nopsema) has ordered the vessel to remain offline until Shell can demonstrate the facility can safely recover essential power and associated essential services following a loss of power, and that the safety systems and essential support systems operate to maintain safety of personnel.
While Shell has not given a definitive timeline of when it anticipates to have its flagship FLNG development back up and running, chief executive Ben van Beurden conceded in a media call on Thursday the operator expected Prelude to be offline “for most of Q1”.
He also indicated that Western Australia’s hard border due to the Covid-19 pandemic was slowing progress on bringing the vessel back into production, with workers coming in from interstate or overseas required to quarantine for 14 days.
“It’s not been made easy because of the pandemic. It’s a remote facility, it is difficult to get people in,” van Beurden stated.
“To get a vendor specialist in means that person would have to quarantine for weeks before they can go on board, so these problems compound the issue a little bit.
“But also we just want to make sure that whenever we restart, we know that we have solved the problem [and] we can do so safely.”
Hard border creates headaches for resource sector
While the majority of Australia is now open to international and interstate travelers, Western Australia Premier Mark McGowan last month delayed his state’s planned 5 February reopening amid the emergence of the Omicron variant of the virus.
With no date set for when Western Australia will reopen, McGowan is facing increased pressure from the resources sector to reduce quarantine requirements down to just seven days.
It has also seen high level executives leave the state, such as Woodside Petroleum chairman Richard Goyder, with the normally Perth-based chairman also the chair of Qantas and the Australian Football League, which are headquartered in New South Wales and Victoria, respectively.
“It’s just been too hard for me to do my job with Qantas and the AFL, based here with the border rules the way they’ve been and the recent change,” Goyder told Perth radio station 6PR earlier this week.
“So I’ll head to Melbourne and base myself there for as long as required.”
Goyder also noted that that four of Woodside’s non-executive directors were internationally based and had been unable to visit Western Australia for two years.
The Woodside chairman also expressed he was keen head to Houston, Texas, to meet with BHP Petroleum employees that will soon come under Woodside’s employment when it completes its acquisition of BHP's oil and gas portfolio later this year.
Goyder also indicated that the hard border was creating worker shortages at Woodside’s oil and gas operations in Western Australia.
“From a Woodside point of view, we’ve had people working extraordinarily hard to keep gas plants going, but they’re pretty well done, and we need to get new people in. And it’s very, very hard with the border situation the way it is,” he told 6PR.