Photo: Prelude FLNG; Source: Shell

Shell sanctions natural gas project off Australia

Oil major Shell and its joint venture partner, SGH Energy, have taken a final investment decision to approve the development of the Crux natural gas field, off the coast of Western Australia.

The Crux field is in Commonwealth marine waters in the northern Browse Basin, 620 kilometres northeast of Broome. It was initially expected to be sanctioned in 2020. The project will provide further supplies of natural gas to the existing Prelude floating liquefied natural gas (FLNG) vessel, which was restarted in April 2022 following a four-month hiatus.

Announcing the sanctioning of the project on Monday, Shell said that the development will consist of a platform operated remotely from Prelude. Five wells will be drilled initially, and an export pipeline will connect the platform to Prelude, which is around 160 kilometres southwest of Crux. Construction will start in 2022 and the first gas is expected in 2027.

Crux will have the capacity to supply the Prelude FLNG facility with up to 550 million standard cubic feet of gas per day (mmscfd).

“This project forms an important part of Shell’s integrated gas portfolio,” said Wael Sawan, Integrated Gas, Renewables and Energy Solutions Director at Shell.

“Natural gas from Crux will play a key role in helping Asian customers move from coal to gas as a cleaner-burning fuel. The project will help us to meet the increasing demand for LNG as the energy market transitions to a lower-carbon future.

“The project will also boost our customers’ security of supply, which is becoming an ever more significant consideration for global consumers.”

The key regulatory approvals, including the production licence from the National Offshore Petroleum Titles Administrator (NOPTA) and the National Offshore Petroleum Safety and Environmental Management Authority’s (NOPSEMA) approval of the Crux Offshore Project Proposal (OPP) have been secured.

Shell Australia Chair, Tony Nunan, stated: “Developing the Crux project reinforces our commitment to Australia, including boosting the regional economy, creating jobs and providing training opportunities.

“The use of Prelude’s existing infrastructure enables significantly reduced development costs, making Crux competitive and commercially attractive.”