Prelude in the supermajor key of FLNG

July 7, 2011

Shell's 100% owned and operated Prelude FLNG project offshore Western Australia, long in the works and given a final investment decision in May, will include what the company boasts is the largest floating offshore facility. Russell McCulley met up in Houston with Shell FLNG general manager Neil Gilmour to discuss the project.

With an estimated first production date set for some time around 2017, Shell hopes to make Prelude the world's first floating LNG development. It will also establish a template for what the company plans to be a series of FLNG projects around the globe.

‘As we get more confident in terms of how we execute this, we think we can speed this up from project one to project two, to project three, to project four,' said Shell FLNG general manager Neil Gilmour. ‘[Prelude] is going to be relatively quick to deploy. Between the discovery well and the first cargo, we think it's going to be less than ten years. And by Australian standards, that's pretty quick.'

The Prelude FLNG facility will measure 488m from bow to stern, weigh some 600,000t when fully equipped and loaded, and absorb about 260,000t of steel. Engineering, procurement, construction and installation will be carried out in partnership with Technip and Samsung. About 650 people are currently at work on the project, including around 350 in Technip's Paris offices working on the design phase. Around 7000 people are expected to be on hand at Samsung's Geoje Island yard in South Korea when construction gets under way next year.

‘When we went out for tender I think there were only three or four drydocks on the planet that could accommodate this piece of equipment,' Gilmour said.

SBM Offshore will provide the internal turret mooring system, which at 105m will be one of the largest units of its type ever constructed.

Shell is looking for annual production from the singletrain LNG facility of around 3.6 million tonnes of LNG, 1.3 million tonnes of condensate and 400,000t of LPG per year. The hull is designed for 50 years' service, Gilmour said, and for 20-25 of those years it will be moored 200km offshore in the WA-371-P permit, where the water depths are around 280m. The vessel will initially be supplied with gas from the Browse Basin's Prelude and Concerto fields but is expected later to accommodate other fields where Shell has an interest. ‘The facility has a 100km reach, so it can reach quite a number of tiebacks.'

Prelude's estimated reserves of 3tcf represent less than 2.5% of Australia's known undeveloped natural gas reserves: ‘not a giant gas field by Australian standards, but it will provide very substantial benefits for Australia', he said.

The project will ‘open up a lot of gas that would be stranded,' Gilmour said. ‘Australia is a good example of that – there's about 140tcf of already discovered, undeveloped gas, which will now be a great deal more accessible because FLNG goes from the drawing board to reality. And Australia is one example of a number of countries where that gas comes into play.'

The extensive planning and testing that went into the Prelude project will expedite subsequent developments, he said, including the Woodside-operated Greater Sunrise FLNG project in the Timor Sea, in which Shell holds a 26.56% interest and will act as midstream operator.

‘We absolutely believe this is a program that can drive future projects,' he said.

The floater's huge scale was necessary, he said, to meet economic and safety objectives. ‘We have looked at smaller sizes, and this worked best from an economies-ofscale point of view.' A smaller vessel, he said, would likely require the same number of people to staff as the Prelude facility. ‘And the sheer size of this thing is a huge advantage' in rough sea states. The facility was designed to remain on station even during a Category 5 cyclone, which can produce winds up to 300kmph and 20m waves.

‘We think warming up and cooling down LNG facilities repeatedly is not very good for them, particularly over a long period of time,' Gilmour said. ‘It's also not a trivial issue to disconnect. You have to prepare [the vessel], tow off some distance away, bring it back, shut the field in, bring it back up – it's technically feasible, but not desirable in this case.'

Building high helps keep green water off the deck – ‘we're confident that will not happen,' he said – and adds stability and protection for carriers docking alongside the Prelude facility. ‘And we designed the equipment so that it won't get any physical damage from wind. It isn't going to do any good if a storm passes through and the hull is okay but part of the LNG equipment is broken or damaged.'

Extensive simulation tests were conducted with tug and carrier captains to fine-tune berthing procedures, he said. Three 6700hp thrusters at the stern will enable the facility to weathervane, allowing carriers to berth in rough weather. ‘We completely changed the berthing procedures . . . based on the captains' experiences in the simulator,' he said.

Prelude will use fixed articulated loading arms to offload the LNG. ‘We've gone for side-by-side loading, but we're also looking at bow-tostem,' Gilmour said. ‘We have the technology in place to do that if necessary.'

The project involved bringing different engineering disciplines and three culturally distinct companies together to create a complete system in a fraction of the space used by land-based LNG facilities.

‘We really felt there were three cultures coming together,' he said. ‘One of the reasons we put more time and energy into it was to bring all those pieces together.' For engineers, ‘there's a tough set of problems you've got to resolve to get this right. We're doing it on a big scale, but many of those challenges are absolutely generic even if you're doing it on a smaller scale. You've got about a quarter of the surface area to get all this kit on than you have onshore. Every square yard is precious.

‘I think we are good at integrating teams – even integrating teams that are not physically located together, but in five or six locations,' Gilmour said. Collaborators ‘had to solve a lot of challenges, and invent things, and use very orthodox things in unorthodox ways'.

Floating LNG's challenges have been economic as well as technical; while ‘onshore LNG is going to be the default for a while,' Gilmour said, FLNG will gain currency as operators seek to exploit remote fields. The technology also has a smaller environmental footprint, allowing projects to proceed with fewer delays than those requiring extensive use of onshore real estate.

Shell has said little in public about Prelude's costs – some estimates have suggested capex of $10-12 billion – but Gilmour insists that the numbers add up. ‘We were not going to get any special dispensation' to develop the company's first FLNG project, he said. ‘We were not going to get the CEO to approve a loss leader. We don't do projects like that. And because we were basically driving the program off the first project, we had to have the fundamentals.'

Beyond Sunrise and other possible projects in Australia, he said, the technology developed for Prelude could be replicated in many locations throughout the world, with Indonesia, India, Africa's east and west coasts, Brazil and New Zealand among the likely candidates.

‘We think there is a rich future for floating LNG, and Shell is absolutely determined to be at the forefront of that future,' Gilmour said. ‘We're not going to rest on our technology laurels. We're not going to spend time and effort to get the first project across the line just to sit around for a few years. We're very keen to work with others to get FLNG projects off the ground.' OE



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