Shell Suspends Production At The World’s Largest Floating LNG Facility

By Charles Kennedy 

Shell has halted production at Prelude LNG – the world’s largest floating liquefied natural gas facility offshore Australia – due to a trip, a spokesperson for the supermajor said on Friday without giving details when production could resume.

“Production on the Shell-operated Prelude FLNG facility has been temporarily suspended due to a trip,” a spokeswoman for Shell told Reuters on Friday.

“We are working methodically through the stages in the restart process with safety and stability foremost in mind,” the spokeswoman added.

The Prelude floating LNG production facility offshore northwestern Australia has an annual capacity of 3.6 million tons.

Friday’s incident is the latest issue that Shell has faced at Prelude LNG in the past year. Between July and September last year, production and exports at Prelude LNG were disrupted due to industrial action at the facility as trade unions demanded higher wages.

Trade unions in Australia extended their strike several times between July and September, also extending the period in which the operator Shell was not able to ship LNG from the facility.  

Shell exported some LNG cargoes from Prelude during the strike, but production was taking place at reduced rates to match storage capacity amid the disruption of the tanker berthing process for vessels to pick LNG.

After the pay dispute was settled, Shell had to shut down Prelude LNG again at the end of 2022 due to a fire that occurred on December 21. A small fire was detected on board Prelude in a turbine enclosure. While the fire was quickly contained using a hand-held extinguisher, and there were no injuries, production at the facility was shut down again. Prelude LNG resumed output around a month after the incident.

Apart from being a major LNG producer, UK-based supermajor Shell is the world’s largest trader of liquefied natural gas.

By Charles Kennedy for Oilprice.com

May 12, 2023