Prelude

Australia is a growth centre for Shell globally. We are developing large gas resources and maintain a substantial exploration portfolio off the coasts of Western Australia and Northern Territory, as well as having interests in coal seam gas opportunities in Queensland.

Shell is the 100% equity holder and Operator of the WA-371-P permit, an area which covers around 1,000 sq km in the remote Browse Basin, 475km north-northeast of Broome, Western Australia. During 2007, Shell discovered the ‘Prelude’ gas field and in March 2009 discovered the 'Concerto' gas field in the permit area.

Prelude and Concerto have around 3 trillion cubic feet of liquids-rich gas.  The relatively small size of the gas fields and the remote location make them an ideal candidate for development via Shell's FLNG technology as it would not be economic to develop the gas via a conventional onshore LNG processing plant.

After processing at the site of the gas field, ocean-going LNG carriers will offload liquefied gas, chilled to -162 Celsius and shrunk in volume by 600 times, and other products, directly from the facility out at sea for delivery to markets worldwide. Until now, the liquefaction of offshore gas has always involved piping the gas to a land-based plant.

FLNG technology is an important development for the LNG industry as it reduces both the project costs and environmental footprint of an LNG development, because there is no need for long pipelines to shore; compression platforms to push the gas to shore; nearshore works such as dredging and jetty construction; and onshore development such as building roads, laydown areas and accommodation facilities.

There are currently no FLNG facilities deployed anywhere in the world, so Shell's Prelude FLNG Project is likely to be the world's first.  For Australia, the Prelude FLNG project will demonstrate a means of developing some of Australia's "stranded" offshore gas reserves - those considered uneconomic for development via an onshore plant because they are too small or remote. The CSIRO estimates Australia has around 140 tcf of stranded gas.

Prelude FLNG artist impression

In July 2009, Shell awarded a consortium of Technip and Samsung Heavy Industries the contract for the design, construction and installation of multiple FLNG facilities over a period of up to 15 years, based upon Shell’s proprietary design.

In May 2011, the Board of Royal Dutch Shell plc made the decision to proceed with the Prelude FLNG Project and start construction of its pioneering FLNG facility, to be the largest floating structure ever built.

The FLNG facility itself will be 488m long and 74m wide, and when fully loaded will weigh around 600,000 tonnes - roughly six times as much as the largest aircraft carrier.  Some 260,000 tonnes of that weight will consist of steel - around five times more than was used to build the Sydney Harbour Bridge.

Once constructed the facility will be towed to location where it will be permanently moored by 4 groups of massive mooring chains in 250m-deep water.  Each mooring chain held to the sea floor by suction piles the size of small houses, and the FLNG facility has been designed to withstand severe weather, even a Category 5 cyclone. Safety of the FLNG facility has been paramount during its design, and its safety is on a par with modern offshore oil and gas facilities.

The Prelude FLNG facility is expected to stay moored at location for 25 years, and is expected to produce at least 3.6 million tonnes of LNG per years as well as Liquid Petroleum Gas and condensate for export.

The Project will contribute to the Western Australian and Australian economies through tax revenues, creating hundreds of jobs and providing opportunities for Australian businesses.

Shell submitted a referral under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) in April 2008 for the Prelude FLNG Project.  The Commonwealth Minister for the Environment determined that the proposed Prelude FLNG Project was a controlled action and that an Environmental Impact Statement (EIS) would be required.

The controlling provisions for the action under the EPBC Act were:

• sections 18 and 18A (listed threatened species and communities);
• sections 20 and 20A (listed migratory species); and
• sections 23 and 24A (marine environment).

Prelude FLNG artist impression

In July 2009, Shell submitted its Draft Environmental Impact Statement (Draft EIS) to the Department of Environment, Water, Heritage and the Arts.

The purpose of the Draft EIS was to provide information that allowed the regulator to assess the proposal against the requirements of the EPBC Act, to inform the general public about the proposal, and to demonstrate that the potential negative impacts have been addressed and potential positive benefits of the proposed project have been maximised.

The Draft EIS for the Prelude FLNG Project was open for public comment for 30 business days from 12 October, 2009, until 20 November 2009.  Shell received three submissions from the public concerning the Project and responded to these comments within the Supplement to the Draft EIS. 

This Supplement, in conjunction with the Draft EIS, constitutes the Final EIS for the Prelude FLNG Project.

You can download the Supplement as well as the Draft EIS by using the relevant links below.

The project received its environmental approval on November 12, 2010, from the Federal Environment Minister with 13 conditions.

Shell is committed to having a positive impact in the countries in which we operate. As part of Shell’s commitment to sustainable development, Shell looks to help meet the world’s growing need for energy in economically, socially and environmentally responsible ways. In practice, this involves working to deliver benefits and reduce impacts, as well as creating employment and supply chain opportunities in the countries in which we operate.

In Australia, Shell seeks to provide full, fair and reasonable opportunity for Australian industries to participate in Shell operations. As the Prelude FLNG Project progresses, Shell will ensure Australian contractors and suppliers are aware of opportunities by working with Industry Capability Network WA and the Project Connect website.

At the ProjectConnect web site (www.projectconnect.com.au/ - opens in new window) you can click on the Shell Prelude FLNG Project and view the current list of project packages which call for expressions of interest from Australian companies that consider they have the capability to deliver to the Project. You can also contact ICNWA direct through details posted on their web site (www.icnwa.org.au/contact_us.html - opens in new window).

Although not a large LNG development, the wider benefits of the Prelude FLNG Project are not insubstantial.  The economic benefits for Australia include:

• Develops gas that otherwise would stay in the ground because of lower development costs
• Creates around 350 direct jobs and 650 indirect jobs
• Provides billions in tax revenues
• Billions will be spent in Australia in capital and operating expenditure
• Opportunities for Australian businesses - Shell is working with Industry Capability Network to maximise local content
• Onshore support services spread between Broome, Darwin and Perth
• Shell will invest in training in WA - Perth will be established a centre for operational excellence in FLNG
• Successfully deploying FLNG at Prelude will be important for the Australian gas industry - Australia has a lot of stranded gas and this provides a means of developing it.

Prelude FLNG artist impression

In addition, although being over 200km from shore means we have no close neighbours.  Shell is keen to have a positive relationship with the Kimberley community.  Shell has been working with a number of community organisations in the Kimberley on social investment partnerships with a strong focus on education initiatives.  Shell is currently partnered with two key organisations in the Kimberley - Indigenous Community Volunteers and Indigenous Communities Education Appeal. 

Shell's social investment program focuses on education.  An open call for new social investment partners in late 2010 yielded a strong response and we will announce some exciting new partnerships soon.