Shell ships first LNG cargo from Prelude FLNG

Oil major Shell has announced that the first shipment of liquefied natural gas (LNG) has sailed from the Prelude floating liquefied natural gas (FLNG) facility, located 475 kilometers North East of Broome in Western Australia.

Shell is the operator of Prelude development in Block WA-44-L offshore Western Australia with Inpex, KOGAS and OPIC as its partners.

This shipment will be delivered by the Valencia Knutsen to customers in Asia, Shell said on Tuesday.

Shell Integrated Gas and New Energies Director, Maarten Wetselaar, said: “Today’s first shipment of LNG departed from Prelude FLNG, safely. Everyone involved should be very proud of the work taken to reach this important milestone.

“Prelude forms an integral part of our global portfolio and plays an important role in meeting the growing demand for more and cleaner energy for our customers around the world.”

Zoe Yujnovich, Chairman Shell Australia said: “Prelude FLNG combines human endeavour and ingenuity from across the globe and here in Australia. We are proud to work with our local communities, suppliers and partners to ensure its safe, reliable operations into the future.”

The Prelude FLNG facility gathers, processes, stores and offloads natural gas and condensate products at sea.

Prelude started production of gas from the wellhead in December 2018 and shipment of condensate in March 2019.

The Prelude FLNG facility will produce 3.6 million tonnes per annum (mtpa) of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG.

The end of Australian greenfield LNG boom

Following the announcement on Shell’s Prelude project shipping its first LNG cargo, senior analyst at Wood Mackenzie, Daniel Toleman, said: “The Spanish flagged Valencia Knutsen has shipped Prelude’s first LNG cargo. The first cargo was more than eight years after FID and nearly two years after the facility arrived in Australia.

“How fast Prelude delivers its second and third cargo, and ramps up to plateau output will be a key indicator of success. Shell will be keen to ramp up to full production quickly to counteract any reserves impact from the already producing and connected Ichthys field.

“The Prelude facility will be backfilled by Crux, which entered FEED this year. We expect an FID late next year with first production in 2025. In addition, later this year Shell will spud the Bratwurst exploration well. If a significant gas resource is discovered it is likely these volumes will be developed via the Prelude facility.  

“With Prelude onstream, Australia is on track to export more than 80 mmtpa of LNG, which surpasses Qatar as the largest LNG producer in the world.

“The completion of Prelude marks the end of the Australian greenfield LNG boom. The next investment cycle is already in sight, with backfill projects – Scarborough, Barossa, Browse, Arrow and Crux – vying for FID.”

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