Shell's Prelude FLNG Wins Environmental Nod

Shell's Prelude Floating Liquefied Natural Gas Project, to be located off the northwest coast of Australia, on Friday received its environmental approval from the Australian Minister for Environment, Tony Burke.


"This is a large-scale project that is using world-first technology," Burke continued. "We can't risk getting it wrong, so I have set very strict conditions to help ensure our precious marine environment will be protected."

According to the regulator, the start of operations will hinge on several plans getting Burke's approval. "Shell must develop an oil spill contingency plan, to the Government's satisfaction, specifying how it will minimize the risks of oil spills and how it will minimize the environmental impacts in the event of an oil spill," Burke said. "Should such an accident occur, the company will pay for any environmental rehabilitation needed."

Also, Shell will need to develop a publicly available greenhouse gas (GHG) strategy that will detail proposed measures and offsets to reduce GHG emissions. "The project will not be able to begin until I am satisfied the strategy is acceptable," added Burke.

Shell stated the approval is welcome news for its 100% owned and operated project as it continues to progress through the engineering and design phase of development. The Prelude Project is planned to be the first to deploy Shell's innovative Floating LNG (FLNG) technology. The technology processes the gas at the site of the gas field rather than piping the gas hundreds of kilometers to shore.

"Receiving environmental approval is an important milestone as we continue to work on the development of the Prelude Project," said Ann Pickard, Shell's Country Chair in Australia. "Deploying our Floating LNG technology reduces the Project's cost and environmental footprint, as it removes the need for offshore compression platforms, long pipelines to shore, nearshore works such as dredging and jetty construction, and onshore development such as building roads, laydown areas and accommodation facilities."

By reducing the cost of a development, FLNG can provide a means of developing smaller and more remote offshore gas resources that may otherwise stay in the ground.

The Prelude FLNG Project's environmental impacts were assessed under the Environment Protection and Biodiversity Conservation Act 1999 through a detailed Environmental Impact Statement (EIS) that assessed potential impacts and proposed mitigants for the duration of the Project. The EIS demonstrated the Prelude FLNG Project will have a low impact on the environment including matters of National Environmental Significance, and that compared to developing the gas via a similar onshore facility, it will produce less CO2 and use significantly less materials and land and seabed area.

Shell is the Operator and 100% equity holder of the WA-371-P permit in the Browse Basin, approximately 475km north-northeast of Broome, Western Australia, and over 200km from the nearest point on the mainland. Shell discovered the Prelude gas field in January 2007 and the Concerto gas field in March 2009, with both fields to be developed sequentially by the Prelude FLNG facility. While pending a Final Investment Decision, the Prelude FLNG Project is now in the Front End Engineering and Design (FEED) phase of development, and is planned to produce 3.6 million tonnes per annum (mtpa) of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG once operational.

The dimensions of Shell's FLNG facility are approximately 480 by 75 meters, and when fully ballasted, the FLNG facility will weigh around 600,000 tonnes.

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