Chief executive Ben van Beurden said Prelude, Shell’s first attempt at FLNG, should generate “real material cash” in 2018.
But he steered clear of disclosing the construction progress and when the floater would leave its South Korean shipyard for the Browse Basin.
The gas world is watching Prelude’s progress, not least the Woodside Petroleum-led Browse joint venture (which includes Shell) which wants to use FLNG as the development option but is pondering technological advances beyond what Prelude is designed to achieve.
Woodside chief executive Peter Coleman has spoken of the potential to shave up to 30 per cent off Browse’s undisclosed development cost by adopting the newest FLNG technologies.
The differing views on Browse is thought to have caused a rift between Woodside and Shell.
WestBusiness reported yesterday that Prelude’s development is running up to two years behind schedule, with the vessel not expected to leave Samsung’s Goeje yard until the second half of next year.
There is also much activity by other players, playing catch-up on Prelude to come up with cheaper set-ups, sparking chatter in industry circles the Shell prototype may already be lagging the sector’s needs by the time it finally starts up.
Speaking on the sidelines of the LNG18 conference, Mr van Beurden said the priority for his “ambitious project” was to ensure the platform’s construction was completed and tested before it was towed to the namesake Prelude gas field, 200km off the Kimberley coast.
The floater’s remote location means any commissioning hiccups will prove costly.
“It has to work in one go,” Mr van Beurden said. “We cannot afford to rework it or do other activities. That will be the key priority and that hasn’t changed, and by and large we are still on track to deliver that.
“I do not think FLNG is some sort of panacea for LNG development. FLNG will be an important tool in a broader tool kit.”
The language is different to Shell’s proclamation of a “true breakthrough” when it sanctioned Prelude in 2011, exciting an industry looking for cheaper development options to costly land-based LNG plants.
Mr van Beurden said Shell and its Prelude construction partners, Samsung and Technip, had learnt a lot of things but said he did not expect the core design to have to be reengineered.
“We will have a serial number 1 on Prelude and we will have to try and replicate its components parts as much as we can but the overall configuration of the future floater might look different,” Mr van Beurden said.
“I can’t imagine the hull being fundamentally different, I can’t imagine the turret being fundamentally different, but the modules on deck, whilst standard in their own right we will have to reconfigure for different types of conditions, gas fields and the subsea (set-up).”