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Delays slow Prelude’s sail-away

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Screen Shot 2016-03-15 at 10.34.57Peter Klinger – The West Australian on April 12, 2016

Royal Dutch Shell’s floating LNG prototype is thought to be two years behind its original schedule, demonstrating the complexity of a new processing module the energy sector hopes will deliver the next generation of liquefaction production.

Prelude’s progress will be a topic of discussion at the LNG18 conference, which kicks off in Perth today and includes sector heavyweights such as Shell chief executive Ben van Beurden.

Shell has never revealed the timetable or budget for Prelude, based on a giant processing vessel built in South Korea to be towed to its namesake gas field off the Kimberley. The latest guidance from Shell is for “material cash in 2018” though that timetable could be challenged.

It is thought the original sail-away target was last April, to enable first LNG by the end of this year. It is unclear how long it will take to hook the Prelude floater to the subsea installations, with sources suggesting anywhere from several months to one year.

But delays to completing construction of the vessel, in Samsung’s Geoje shipyard, is thought to have pushed the likely sail-away date out to between July and October next year, suggesting the first LNG will not be produced until mid-2018.

Prelude’s budget is expected to approach $US20 billion, compared with the $US12.6 billion guidance Shell gave at the project go-ahead ceremony in 2011.

Shell would not comment yesterday. Shell Australia chairman Andrew Smith has previously spoken about the need to get Prelude’s vessel construction right to avoid the need for major works once it is towed to its offshore location.

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