Shell's Breakthrough Technology for Timor Sea

Shell Development (Australia) Pty Ltd (SDA) unveiled a proposal to use the world's first floating liquefied natural gas (FLNG) technology to develop the Greater Sunrise gas fields in the Timor Sea.

The new generation facility would be located offshore on a barge, close to the proposed Sunrise drilling platform. It would be an industry first, placing Australia in the forefront of applying advanced LNG engineering.

Chief Executive Officer of SDA, Dr. Alan Parsley said: "This breakthrough results from an innovative combination of three well-established technologies: Floating Production Storage and Offtake (FPSO) vessels for oil production, LNG shipping and LNG plant design.

Based on our extensive experience in each of these areas, we have been able to propose a project which will deliver world class cost, environmental and safety performance. As a demonstration of confidence in this innovative technology, Shell will stand behind the FLNG proposal."

As well as manufacturing LNG, the barge offers the option of compressing gas for delivery by pipeline to Darwin, which would support the development of new industries in the area and provide for the longer-term supply of gas to customers in the eastern states of Australia.

SDA outlined the proposal to the joint venturers in the Sunrise gas fields, who will compare its merits with an onshore LNG development proposal made earlier this year by Phillips Petroleum. The FLNG barge can be delivered within the overall schedule for development of Sunrise.

Dr Parsley continued: "We have been seeking a formula for the development of our gas resources in the Timor Sea which is commercially and environmentally sound, and with this package we believe we have found it. The combination of FLNG and the potential to supply gas to shore provides the foundation for a huge gas development project that will boost the economies of Australia and East Timor.

"The Floating LNG approach to development of Sunrise offers cost reductions over construction of an onshore plant and thus generates commercial returns for shareholders in Sunrise, and substantial tax revenues which will deliver benefits for the people of Australia and East Timor.

"Sunrise developed with FLNG also delivers superior environmental performance, with reduced greenhouse gas emissions.

"The project proposed by Shell is in line with our commitment to sustainable development, offering commercial, environmental and social benefits to Australia and East Timor. "The decision to deploy this breakthrough technology is evidence of the strategic importance the Royal Dutch/Shell Group places on development of its gas resources in the Timor Sea."