Anglo-Dutch supermajor Shell finally started initial production at its landmark 3.6 million tonnes per annum Prelude floating liquefied natural gas project off Australia, just ahead of its latest stated plans to achieve start-up before the end of 2018, writes Amanda Battersby.

The operator said on Christmas Day that the wells had recently been opened at the Prelude FLNG facility. Gas was introduced into the facility in June last year and then offshore testing and commissioning work began before the start of LNG exports, now expected this year.

“Prelude now enters start-up, ramp-up, which is the initial phase of production where gas and condensate is produced and is moved through the facility. Once this has concluded the facility will be stabilised for reliable production of liquid petroleum gas and LNG,” said Shell Australia. “The focus continues to be on providing a controlled environment to ensure Prelude will operate reliably and safely now, and in the future.”

The world’s largest FLNG project to date is exploiting the giant liquids-rich Prelude and Concerto fields that are located 475 kilometres north-northeast of Broome in Western Australia.

The 488-metre long Prelude floater, which has been on location since July 2017, can also produce up to 1.3 million tpa of condensate and 400,000 tpa of liquid petroleum gas.

The FLNG unit was constructed by the Technip Samsung Heavy Industries Consortium at Samsung’s Geoje Island yard in South Korea, while SBM Offshore built the turret mooring system under a sub-contract.

Shell took the final investment decision on Prelude in May 2011 and had initially been targeting production start-up in 2017.

Company officials earlier privately confirmed to Upstream the frequently touted US$12 billion capital expenditure, while stressing that this amount included all of its historic FLNG work and studies and not just the Prelude project itself.

However, some industry sources have claimed that the costs have increased to as much as US$20 billion.

Looking to the future, the supermajor has already embarked on initial work to exploit its Crux gas condensate field as a tie-back to the Prelude FLNG unit, and has invited bids for a pre-front-end engineering and design contract.

Partners in Prelude are operator Shell with 67.5%, Inpex of Japan on 17.5%, South Korea’s Kogas with 10% and CPC of Taiwan having 5%. Of Inpex’s equity portion of the produced LNG, about 560,000 tpa is to be supplied to Jera and about 700,000 tpa to Shizuoka Gas at plateau production volume, thereby contributing to the stable supply of energy to Japan.

Kogas has long-term import contracts with Shell and Total for a combined 5.64 million tpa of LNG from Australian projects, while CPC has a 20-year contract to buy 2 million tpa of LNG from Shell.

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Shell finally opens the taps at Prelude FLNG