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Shell ponders Crux field connection to Prelude FLNG project

The Perth-based Australian subsidiary of Royal Dutch Shell PLC has begun the approval process for a potential $2-billion (Aus.) development of its Crux natural gas-condensate field in the Browse basin license AC/L9 offshore Western Australia as a tie in to the company’s Prelude floating LNG (FLNG) facilities.

Crux has long been considered a likely second phase to Shell’s $16.6-billion (Aus.) Prelude development that has recently been brought on stream via the world’s largest FLNG vessel permanently moored in the field.

Initially the hook-up was not envisioned for many years, as a back-fill when production of gas from Prelude began to decline late next decade. A development plan recently submitted to Australia’s National Offshore Petroleum Safety & Management Authority (NOPSEMA), however, outlines the start of front-end engineering and design work for Crux later this year leading to a final investment decision in 2020.

The plan for Crux comprises a fixed steel-legged platform in 165 m of water with minimal processing facilities and not normally manned. There will be five subsea production wells tied back to the platform through rigid tubulars and completed with dry trees on the deck. Gas will then be sent to the Prelude facilities via a 165-km, 26-in. pipeline for processing through the FLNG plant. The Crux platform will be operated remotely from Prelude. The construction and installation of Crux facilities is expected to take 4-5 years from FID, which means an onstream data of about 2025.

Crux lies 190 km off Western Australian, 160 km northeast of Prelude, and about 620 km north-northeast of Broome. The field has reserves of 2 tcf of gas and 70 million bbl of condensate. It was discovered in 2000 by Melbourne explorer Nexus Energy Ltd., which planned to begin development with a liquids stripping operation.

The global financial crisis of 2008 caught Nexus with insufficient funds to proceed and the company eventually made a deal with Shell in 2012 whereby it sold the reinjected gas to Shell with a proviso that it not begin gas production until 2021. Shell picked up an 82% interest in the field. Nexus then had 15% and Japan’s Osaka Gas had the remaining 3%.

Nexus continued to struggle and was finally taken over in 2014 by SGH Energy Pty. Ltd., the Melbourne-based oil and gas arm of media company Seven Group Holdings Ltd.

SGH Energy and Osaka gas have retained their interests and are supportive of Shell’s push to bring Crux on stream sooner than originally planned.

Some analysts suggest that the bringing forward of Crux development could indicate that the recoverable reserves of gas at Prelude are lower than initially thought and that the reservoir pressure at Prelude may have been reduced by production from Inpex Corp.’s Ichthys field, which is believed to be geologically connected to Prelude.

The Crux development proposal submitted to NOPSEMA is open for public comment until Mar. 18.


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