Shell: Prelude FLNG Go-Ahead 'Next Few Months,' More Planned

PERTH (Dow Jones Newswires), Feb. 22, 2011

Shell said that it expects to sign off on its first floating liquefied natural gas project within months, and plans to build at least six FLNG plants around the globe.

Shell hopes to take a "final investment decision in the next few months" on the company's multibillion-dollar Prelude FLNG project offshore northwestern Australia, Shell Australia Chairman Ann Pickard, told a business event in Perth.

The world's first commercial FLNG venture, Prelude will be the forerunner for further Shell projects using the technology, Pickard said.

"We are committed to build probably six of these to start with for places around the world."

After Prelude, Shell's next proposed FLNG venture is the Woodside-operated Sunrise venture in the Timor Sea to the north of Australia, Pickard said.

She said Shell is also looking at a "potential number three" FLNG project, but didn't provide details.

The gas and oil major is developing FLNG to process "stranded" offshore gas deposits that are too expensive and remote to develop using conventional land-based LNG plants. Australia has roughly 140 trillion cubic feet of stranded gas, Pickard said.

"This (FLNG) isn't going to be fit for all of it, but it is going to be fit for a lot of it," she said.

The company is planning a global recruitment and training regime over the next five years to provide skilled workers for Prelude, she said. "Australians should become the experts around the world in this technology," she said.

Shell, which is also a minority partner in the A$43 billion Gorgon LNG venture in Australia, remains confident about the long-term demand for LNG, particularly in Southeast Asia, Packer said.

She said the construction of LNG receiving terminals in non-traditional markets such as Malaysia, India, Pakistan and the Middle East is encouraging.

"All these new terminals are going in place, so there is going to be a lot of gas required to meet all this demand," she said.

Copyright (c) 2011 Dow Jones & Company, Inc.


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