Shell’s Prelude floating LNG project has taken longer than expected to start up. Shell Australia
By Angela Macdonald-Smith: 01 Feb 2019
Energy giant Shell has brushed off persistent talk about technical problems dogging the start-up of the huge Prelude floating LNG project off Australia’s far north-west coast but has signalled the first LNG cargo from the closely watched venture may still be several weeks away.
The multinational announced the beginning of production from the offshore Prelude gas field in late December but is still in the process of commissioning the complex LNG processing systems on board what is the world’s largest floating structure.
Quizzed by reporters on “liquefaction problems” that have supposedly been encountered in the processing facility during the process to bring the project onstream, Shell’s head of integrated gas, Maarten Wetselaar, said Shell is “going through a very methodical process of turning on the midstream, section by section, and that’s progressing every day”.
Meanwhile, Shell reassured investors about the growth of gas demand in China, despite the economic slowdown in the world’s biggest growth market for the fuel which is also an important LNG buyer for Australian exporters.
Mr Wetselaar told investors in London that gas demand in China is “resilient” and isn’t dictated by economic growth but by policy, given the push to displace coal to clean up air quality. He noted that China’s gas markets grew by 16 per cent last year and energy imports by 40 per cent despite “mixed” economic growth.
“We believe there’s still a lot of replacement of coal displacement scope to go [in China] and elsewhere in Asia; we see a similar trend in India,” he said.
“It’s earlier days and policies are not yet as well matured and implemented as we see them in China. But starting so in India it’s about 4 per cent gas market growth, and leading to 10 per cent LNG import growth.
“So, I do think these markets still have a resilient growth ahead of them, that is to a large extent actually decoupled from their economic performance because of the displacement.”