Shell Starts Construction of 'Game-Changing' Prelude FLNG Facility

Construction has started on what Royal Dutch Shell calls its "game-changing" Prelude FLNG (floating liquefied natural gas) project. The firm reported that first steel was cut Thursday on the project's FLNG facility's substructure at Samsung Heavy Industries' Geoje shipyard in South Korea.

The Prelude FLNG facility is scheduled to be ready in 2017, when it will be deployed in Australian waters on the Prelude gas field some 200 kilometers from the coast of Western Australia. It will be 1,600 feet long and 242 feet wide, which will make it the largest offshore floating facility ever built.

"We are cutting 7.6 tons of steel for the Prelude floating liquefied natural gas facility today, but in total, more than 260,000 tons of steel will be fabricated and assembled for the facility. That's around five times the amount of steel used to build the Sydney Harbour Bridge," said Shell Projects & Technology Director Mattias Bichsel at a ceremony marking the beginning of the construction.

The Prelude FLNG facility will produce gas at sea, turn it into liquefied natural gas and then transfer it directly to the ships that will transport it to customers. It is expected to stay moored at its location off Western Australia for 25 years and produce at least 3.6 million tons of LNG per year.

Shell sees LNG, and natural gas in general, as key to its future – as Marjan van Loon, the firm's head of LNG for Shell Products & Technology, explained at a presentation attended by Rigzone at the company's Rijswijk technology center in the Netherlands earlier this year. Global gas consumption is set to increase by more than a third between 2011 and 2030 (source: IEA), while this year will see the majority of Shell's hydrocarbon output be composed of gas rather than oil for the first time.

The company was involved in a fierce takeover battle with Thailand's PTT Exploration & Production in the spring of this year for Cove Energy – which has a significant stake in Mozambique's gas-rich Rovuma Basin that analysts believe could support more than a dozen LNG trains.



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