Major construction begins on the Prelude FLNG project
Oct 18, 2012
Today Shell celebrated the cutting of first steel for the game-changing Prelude floating liquefied natural gas (FLNG) facility’s substructure with joint venture participants, Inpex and KOGAS, and lead contractor, the Technip Samsung Consortium, at Samsung Heavy Industries’ Geoje shipyard in South Korea.
Shell’s Projects & Technology Director Matthias Bichsel commented: “We are cutting 7.6 tonnes of steel for the Prelude floating liquefied natural gas facility today, but in total, more than 260,000 tonnes 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. Today’s ceremony marks a major milestone in this project, when the innovative thinking and new technology and engineering solutions which will make FLNG possible begin to be realised.”
When completed, the Prelude FLNG facility will be 488 metres long and 74 metres wide, making it the largest offshore floating facility ever built. When fully equipped and with its cargo tanks full, it will weigh more than 600,000 tonnes. There will be over 3,000 kilometres of electrical and instrumentation cables on the FLNG facility, the distance from Barcelona to Moscow.
“Making FLNG a reality is no simple feat,” Matthias continued. “Shell is uniquely positioned to make it a success given our commercial capability; our LNG, offshore, deepwater and marine technology; and our proven ability to successfully deliver megaprojects.”
In order to meet the world’s growing energy demand, bringing new supplies to market is critical. The Prelude FLNG facility will be deployed in Australian waters over 200 kilometres from the nearest point on the coast. It 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.
An expert team from Shell will manage the multi-year construction of the FLNG facility to ensure the Prelude project’s critical dimensions of safety, quality, cost and schedule are delivered. Strategic partners Technip France and Samsung Heavy Industries (the Technip Samsung Consortium) along with SBM and hundreds of suppliers and contractors around the world are all contributing valuable knowledge, skills and equipment to help make the project a success. At peak levels, around 5,000 people will be working on the construction of the FLNG facility in South Korea; and another 1,000 will build the turret mooring system, subsea and wells equipment in other locations across the globe.
In the lead up to the facility being ready to start production, a number of actions will take place, such as drilling the production wells, installation of subsea flowlines and risers and mooring chains to prepare for the arrival of the FLNG facility.
The Prelude FLNG project will provide significant benefits to Australia, creating hundreds of jobs and opportunities for businesses, as well as improving the country’s balance of trade and contributing significant tax revenues. In addition to direct employment on the facility, onshore support services such as aviation, marine services, drilling and onshore maintenance and spares will support the facility’s operation.
Prelude FLNG is the latest in a line of Shell achievements in developing new technologies for the oil and gas industry, reinforcing its leadership in technology and innovation. This is the first of what Shell expects to be multiple Shell FLNG projects.
Notes to editors
In 2012, Australian subsidiaries of INPEX Corporation (17.5%) and Korea Gas Corporation (10%) joined the Prelude FLNG project. An Australian subsidiary of CPC Corporation (5%) has also signed an agreement to do so. Completion of this transaction remains subject to conditions including Taiwanese government approval. By taking a stake in the project, INPEX, KOGAS and CPC show the confidence they place in Shell’s FLNG technology.
FLNG will enable the development of gas resources ranging from clusters of smaller more remote fields to potentially larger fields via multiple facilities where, for a range of reasons, an onshore development is not viable. This can mean faster, cheaper, more flexible development and deployment strategies for resources that were previously uneconomic, or constrained by technical or other risks.
Many of the technologies used on the FLNG facility are ones that Shell has used successfully onshore, but some have been extended or modified for offshore. The new technologies that Shell developed for FLNG include: managing sloshing in LNG tanks; systems for managing the close coupling between the producing wells and the LNG processing facility; LNG offloading arms; water intake risers; mooring systems; and the marinisation of processing equipment such as absorption columns and the main cryogenic heat exchangers. All of these technologies have been extensively modelled and tested to ensure they can operate safely and efficiently under marine conditions.
Shell’s innovation in FLNG has been recognised by the industry including:
- Lloyd’s List award for Technological Innovation 2012
- CWC / WGI LNG Award for Outstanding Contribution to the Industry 2011
Shell International Media Relations: +44 (0) 20 7934 5550
Australia: +61 417 007 344
Royal Dutch Shell plc
Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 100 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit www.shell.com
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this press release “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this press release refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this press release, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This press release contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this press release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2011 (available at www.shell.com/investor and www.sec.gov). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this press release, 18 October 2012. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this press release.
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We may have used certain terms in this press release that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.