Shell’s Prelude FLNG to start production in 2017?

Shell’s giant Prelude FLNG facility will likely start producing chilled gas offshore Western Australia next year, according to the Northern Territory deputy Chief Minister Peter Styles.

Speaking on the sidelines of the LNG18 conference in Perth on Thursday, the Minister said that Prelude FLNG, which was according to him expected to begin production this year, will likely start production in 2017.

The Hague-based LNG giant Shell has never been clear on when it expects to start producing chilled gas from the giant floating facility to be located at the Prelude gas field off Australia.

A spokeswoman for Shell declined to comment to LNG World News on the expected schedule for the Prelude FLNG project. However, the spokeswoman referred us to a statement by Shell CEO Ben van Beurden he gave during a media round table event at the LNG18 conference:

“We expect real material cash from Prelude in 2018, and we never really laid out exactly the schedule on how it will work and come on stream. It is, of course, a very new development. We cannot afford to rework it or to do other activities once it’s out there. So that will be the key priority, and that hasn’t changed and by and large we are still very, very much on track to deliver that.”

Shell’s Prelude FLNG facility, being built at Samsung Heavy Industries’ Geoje shipyard in South Korea, is the largest of its kind with 488m in length and 74m in width.

The FLNG facility is expected to stay moored at the Prelude gas field for 25 years, and is expected to produce 3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG for export.

However, it will not win the title of world’s first floating LNG producing facility in operation. Petronas’ PFLNG SATU will most likely win that title once it starts production in the coming months.

As LNG World News understands, Petronas’ first FLNG is expected to leave DSME’s shipyard in Okpo, South Korea in May, with the first cargo from the FLNG facility expected by the third quarter this year.

Exmar’s Caribbean FLNG is also set for delivery in the second quarter this year, however, without employment as the deal with Pacific Exploration and Production was terminated.

This year turned out to be not as promising for FLNG developments as two of them hit the wall, namely Woodside’s Browse FLNG project and Inpex-operated Abadi FLNG.

The Browse JV partners decided not to move ahead due to the “current economic and market environment” while Indonesia decided to move the Abadi project onshore as it looks to reap more benefits from the project.

However, even tough the FLNG industry is facing rough times, this year will for sure be groundbreaking for this new industry as the first floating LNG producing facilities hit the water.

By Mirza Duran