Zoe Yujnovich’s address at The Resources Technology Showcase 2019
Nov. 27, 2019
Read Shell Australia Chairman, Zoe Yujnovich's full address at The Resources Technology Showcase.
I would like to begin by acknowledging the traditional custodians of the land we are meeting on this morning, the Whadjuk people of the Noongar nation.
On behalf of Shell, I pay my respects to Whadjuk Elders past, present and emerging, as the modern-day custodians of one of the oldest, continuing cultures on the planet.
Ministers, distinguished guests, ladies and gentlemen.
Hello and it’s great to be asked to speak at the inaugural Resources Technology Showcase 2019.
As a proud Western Australian, it’s humbling today to be here in Perth to showcase the amazing technology that enables the resources industry to supply Australia and the world with raw materials and energy.
Even within Australia, when people think of Western Australians they think of people with a pioneering spirit.
Perhaps it comes from our Indigenous culture that found the way to live on the land for thousands of generations in really tough terrains.
Perhaps it’s also been influenced by early seafaring explorers who set off from Europe not knowing what they would find.
Many found out the hard way just how hard and unforgiving the WA coast is, and in my own career I’ve experienced that first hand, from the coastal city of Perth to Broome, where we head off to Prelude, and inland to the red earth of Paraburdoo.
My personal favourite moment as I reflect about my experiences in Western Australia was a recent one and indeed it was onboard our Prelude facility. We had an unusual opportunity to do yoga on the heli deck and from that perspective you see 360-degree panoramic views of beautiful large open spaces.
And I can say that in that space, with the open seas and with endless blue sky it really allows you to think about the magnitude of what we can dream and the potential that we have within our business.
So today, here at the Resources Technology Showcase in Perth, I want to take you on our journey of ‘Harnessing the Power of Technology at Shell’.
From way above in space to way below the sea floor.
From today, to over the horizon, a telling of what we seek to achieve.
So, today at Shell, we are in the business of providing more and cleaner energy that the world needs. We want to power progress together, working with governments, industry, customers and the community.
And Shell Australia operates in the same neighbourhoods as some of the most rapidly urbanising nations on Earth.
So how do we meet the growing global demand for energy as the world’s population and rate of urbanisation grows?
And do it in a way that recognises the need to curb the global greenhouse gas emissions that society expects of us?
Communities will inevitably look to the resources industry and companies like ours that have the scale and the technical know-how to find and develop more and cleaner energy supplies for the future.
And here in Shell, in addition to playing our part in the West Australian LNG industry, we are honing our LNG expertise through developing and deploying a wide array of technologies.
A lot of them are centred on what you might call heavy engineering: the compressors, pumps, valves and pipes that are involved in the manufacturing of our LNG.
But we also focus on technologies to optimise the processes that we follow.
And at the head of the pack are the digital technologies such as machine learning, robotics with machine vision, the ‘Internet of Things’, blockchain, and of course augmented and virtual reality.
But digitalisation is more than technology.
It is a cultural change, about people and creating more agile ways of working.
In fact, we are not pushing digitalisation from the laboratory to the field. Digital technology is a ‘pull’ from people who are working within our production fronts, in our producing assets – our people want the benefits these advanced tools bring.
We employ leading data scientists who work with experts and teams across our business to combine commercial acumen to then solve real world problems with technical and data expertise.
Digitalisation has a big role in delivering all three of Shell’s strategic ambitions: to be a world-class investment case; to thrive in the energy transition and to strengthen our social licence to operate.
Digital technologies support our world-class investment case by allowing us to really focus on reducing waste. It’s the simple things that allow us to understand where we either have redundancy or indeed inefficiencies, it helps us to reduce our costs, improve the productivity, reliability and performance of our activities.
We use algorithms in predictive maintenance to minimise lost production and to fix things that are edging out of spec before they fail.
For example, gas compressor failure is the biggest cause of unscheduled downtime in our industry, and digital predictive maintenance capability enables us to see the early signals and act before an incident or failure occurs, saving literally millions of dollars that would have been lost from unplanned shutdowns, not to mention the safety benefits of planned activities.
Digital technologies allow us to thrive through the energy transition to lower-carbon energy as they are an important tool for monitoring and improving energy efficiency, both for Shell and indeed for our customers.
In our worldwide operation we are analysing more than 10 million data points about plant equipment every minute. And that’s to help us optimise and continue to improve their performance.
And finally, digital technologies helps our social licence to operate by improving the safety and transparency of our operations. They can help us use resources more efficiently…to use less for a far greater outcome…or use robots where indeed conditions are hazardous to people.
So what does this look like in practice?
Take our latest asset, Prelude, for example.
Prelude is our floating LNG facility developed with our partners INPEX, KOGAS and OPIC, moored 475 kilometres off the coast of Broome.
Simple in idea but indeed complex in execution. Never been done before on this scale.
Once we used to call the North-West Shelf the ‘loneliest gas on earth’ and here we are now nearly two decades later with Browse, a further 200 kilometres away from the nearest landfall, with what some would have regarded as ‘stranded gas’.
So, our engineers figured, if you can’t take the gas to the plant, then why not try and take the plant to the gas?
Prelude has been designed to float above the gas fields, connected to the seafloor wells. Gas from the wells flows to the onboard liquefaction plant and into Prelude’s storage tanks in the giant hull.
From there, LNG carriers pull up alongside Prelude at sea, to fill up, and sail off to places where cleaner energy is in high demand.
Rather than me tell you about facts and figures, I thought I’d let the scale of this project be told through its most important asset, its people. Let’s roll the tape…
We’ve been offloading cargoes at Prelude since June, and though I wouldn’t say it’s become quite routine yet, what I can say is that we have been able to show it can be done safely and steadily.
In fact, the regularity of its LNG production tends to gloss over the significant challenges that you often have to face when you’re in frontier projects, like Prelude experiences.
Prelude is located in what’s dubbed ‘cyclone alley’. Because of that we’ve designed and built Prelude to withstand greater than a Category 5 cyclone…so that’s a one-in-10,000-year storm…without having to evacuate any of our people onboard.
All of this has required a great deal of innovation – in particular ensuring the equipment and design is functional and fulfills the best standards we can find in the marine environment.
And offloading LNG to carriers in the marine environment sounds so simple but actually let me tell you a little bit about the complexity that site under the cover.
We designed, built, tested and installed first-of-a-kind marine loading arms, that enable offloading of LNG between Prelude and a tanker that’s pulled up alongside it.
Tankers naturally bob up and down next to Prelude. And if strong sea movements exceed safety margins, the loading arms are designed to automatically decouple from tankers without spilling any liquified gas whilst being transferred.
But just as you never truly know the idiosyncrasies of a new place until you move into a new home, I can tell you that we’re really starting to learn about operating Prelude by getting to know the marine environment we’re operating in.
We are harnessing data science and collaborative research to help us to optimise the way we operate Prelude.
And we’re doing this right here from Perth.
We and our industry partners are collaborating with the University of Western Australia in research at the Hub for Offshore Floating Facilities. It’s a research hub that Shell, Woodside, Bureau Veritas and Lloyds Register co-sponsor under the Australian Research Council’s Industrial Transformation Research program.
The university’s professors and PhD students have teamed up with us and our industry partners to conduct important research in the fields of metocean − that is, the meteorology and oceanography of the site − as well as hydrodynamics and geotechnics to tackle a range of offshore engineering challenges that face the LNG industry here.
These fields of research help us to optimise the performance of Prelude in the challenging site environment that you might expect in the Indian Ocean.
Now, I promised I would take you on a voyage from space to the ocean floor, and that’s exactly where we’ll now head.
At the atmospheric level, beyond designing for cyclones, there is the unpredictability of squalls, and the storm front they bring.
At sea level, there are more transient events, such as solitons or self-generated erratic internal waves, and eddies that are circular currents that spin like whirlpools, which need to be monitored for their effect on our planned operations.
At the seabed, where we inspect and maintain our wells and flowlines, there is typically low visibility due to deep currents that keep sediment churned up.
To get a handle on these factors, we are combining a range of technologies from our traditional metocean scientific instrumentation for monitoring the seas with the latest technology from space, delivering frequent satellite observations and highly accurate positioning data.
Combining multiple data sources gives us a bigger picture of the site and helps us understand the best times and ways to organise the LNG offloading process.
What it means essentially is that it is the safer and much more efficient operation of Prelude that allows us to berth of LNG carriers for offloading cargoes of liquid gas.
Our people are safer. Our assets are safer and there is lower risk to the environment. And our customers benefit from predictable energy supply.
And while Prelude has finite capacity, in terms of processing and storage, we are investigating ways to maximise its efficiency by creating a twin ‘Prelude’.
Not out of steel…but out of binary code.
We believe we can maximise the operational efficiency of Prelude by developing the digital twin, based on our experience of operating platforms in the North Sea in Europe.
A digital twin essentially integrates how we operate, maintain and inspect an asset, even as complex as Prelude, recreated in a virtual and digitised world.
It involves integrating data from the dynamic site environment and production systems to simulate operations virtually, to identify optimum ways of running the production and scheduling of offloading cargoes.
We continue to look for ways to extend these technologies. How we can model our entire hydrocarbon processes, from well to customer, to represent a real-time model of our end-to-end value chain.
Prelude’s business case was based on it being deployed and operating in the field for about 25 years.
And this is where I want to take you…to the future.
The next phase of Prelude’s operations is over the horizon.
It involves the Crux gas field, about 160 kilometres further out to sea from Prelude.
We and our joint venture partners, Seven Group Holding Energy and Osaka Gas, are considering options to best develop the Crux field.
One option is developing Crux as a tie-back to Prelude, providing hydrocarbons via a pipeline to Prelude for processing into LNG.
We think the application of digital technologies might allow us to develop Crux as an autonomous platform, without having any people normally stationed there.
It’s what we call a ‘not-normally-manned’ operation. Reduces risk to personnel because generally speaking the safest place for people is onshore. By reducing the number of man-hours spent offshore we can reduce overall risk exposure.
‘Not-normally-manned’ platforms require the wells and surface equipment to be highly reliable, giving high uptime and avoiding manual interventions and unplanned facility visits.
And the use of ‘hi-tech’ can, conversely, also allow us to go ‘lo-tech’.
One approach is “What you don’t have, can’t break”. This principle drives minimising topside equipment and selecting simple, low complexity gear to minimise maintenance requirements.
And it allows us to operate efficiently in harsh environments without putting people at risk.
But it’s going to require not only computers and algorithms to succeed, it’s going to require the expertise of scientists and engineers well into the future.
These are the sustainable, high-value, skilled jobs of the future to make projects like Crux work.
And while we are contemplating the future, today at Shell we are laying the ground work to find even cleaner and more plentiful energy for tomorrow.
People tend to think of us as an oil and gas company, but those who follow us perhaps more closely will know that we ourselves are in a state of evolution to become an integrated energy company.
By mid-century, we expect to see the electron start to overtake the hydrocarbon molecule as the primary source of energy.
That’s why we are now moving into the electricity arena, with strategic investments in companies such as sonnen, with manufacturing operations in Adelaide, which makes home batteries for solar systems coupled with smart power management solutions.
And why we also made an offer for ERM Power, Australia’s second-largest power trader for commercial and industrial customers that also happens to own gas-cycle electricity generators.
All going well, on Friday of this week we will be in Brisbane to announce the integration of the ERM into our business.
And we have advanced plans to build a 120 MegaWatt solar farm in Queensland.
Our move into electricity is consistent with our Net Carbon Footprint reduction aspirations.
But there is another energy source that…like LNG…is both combustible and can be used in electricity generation, that I’d like talk about.
It is as old as the universe itself. And depending on how it’s made, is virtually free of greenhouse emissions, end to end.
It is, of course, hydrogen.
Hydrogen has significant potential in a clean and low-carbon energy system.
It can be used as a fuel for power plants and as a feedstock for industry.
I think the world is looking forward to seeing how Japan will manage through the 2020 Olympic Games and see the potential that hydrogen may have to offer.
Globally, Shell is already collaborating with industry partners to help commercialise hydrogen technology.
For example, in Germany, we and five associated partners from the energy and automobile sectors have founded Hydrogen Mobility Germany and we’ve installed 500 stations throughout the country, which will be completed by 2023.
We aim to have 25 of those in operation by the end of this year.
And we are building a 10-megawatt electrolyser, the largest of its kind, to produce hydrogen for our Rhineland refinery in Germany.
In California, Shell already operates two hydrogen stations in Los Angeles and is currently working in collaboration with Toyota, Honda and Anglo American to build a further seven stations. We expect all to be open before the end of 2020.
Here in Australia, we believe there are significant opportunities for hydrogen production, distribution and indeed export, and we are currently assessing which parts of the value chain present the most compelling commercial opportunities for our company to pursue.
However, the broad commercial use of hydrogen in the global energy system is still in its infancy.
The learning here is that undoubtedly that governments, industry and academia needs to work together if hydrogen is to become more commercially viable, just as we have done for LNG.
So in the future, how will my company be thought of for what it is doing today?
Science and technology are not an end in themselves, and we shouldn’t just do things just because we can, but because they are the right thing to do.
Our company’s chief executive, Ben van Beurden, was in London recently awarded the global Energy Executive of the Year. It’s that strength of global leadership with local impact that gets me excited to come to work each day.
I think that what this industry can achieve technologically is astonishing. But it is not actually magic, of course it’s science.
And although it is still seductive, especially to an engineer like myself, I believe it does not, and should not, define our industry. I believe our industry should be defined by the effect we have on society, for good or ill.
I believe that we, Shell, and indeed our industry at large, can dramatically improve hundreds of millions of lives. Most obviously, by providing reliable access to energy for those who do not have it, but much more too. Because energy, indeed as we know, is critical to progress.
And that’s the point I would like to leave you with.
With more and cleaner energy available, I believe that our people’s efforts and advances in technology in Shell and in the energy and resources industry more generally, will make life more liveable for more people on our blue planet than at any time that has come before.
Thank you and I hope you enjoy everything this Resources Technology Showcase has to offer.