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Australia’s Prelude LNG faces indefinite shutdown


Australia’s Prelude LNG faces indefinite shutdown

Published date: 28 December 2021

Production at the 3.6mn t/yr Prelude floating LNG project in the Browse basin offshore Western Australia (WA) will be halted until Shell demonstrates that its facility is able to operate safely in the event of power loss, Australia’s offshore security regulator said.

The National Offshore Petroleum Safety and Environmental Management Authority (Nopsema) issued a notice to project owner and operator Shell on 23 December, instructing it to investigate the “incidents and associated consequences” that took place at the Prelude facility early this month and present a plan for all necessary corrective actions.

Shell must provide a report “on the first business day of each month commencing March 2022” on the progress of its review and plan, Nopsema said.

Shell suspended production at Prelude after a fire broke out at the facility on 2 December. The incident resulted in the loss of main power and the facility was operating on back-up diesel generators, a Shell spokesperson said on 3 December.

“Shell is required to demonstrate that the facility can operate safely in the event of power loss,” Nopsema said. “Until this can be demonstrated production is not able to commence.”

Inspectors from Nopsema visited the Prelude facility from 8-10 December and “concluded that the operator did not have a sufficient understanding of the risks of the power system on the facility, including failure mechanisms, interdependencies and recovery,” the regulator said.

The 2 December incident resulted in a complete loss of power at the facility, which subsequently led to unreliable and intermittent power availability over the next three days. Multiple attempts were made to re-establish reliable power during this period, but the failure to do so by 6 December “was seen to represent an ongoing impact and risk to the health and safety of the personal on the facility,” it added.

Nopsema said it is aware that Shell had planned an investigation to determine the cause of the power system issues that led to the incident.

But the proposed scope of the investigation does not thoroughly review the “evidence and root cause analysis of the entire series of events” on 2 December, the risks for future similar incidents, and the actions to mitigate them, Nopsema said.

Prelude has not loaded any cargoes since the incident. The last loading was on the 147,608m³ Symphonic Breeze on 26 November, according to vessel tracking data from oil analytics firm Vortexa. The vessel departed the facility a day later and arrived at the Inpex-operated Naoetsu terminal in Japan’s Niigata prefecture on 11 December, Vortexa data show. There were three loadings in November and two in October.

Prelude only resumed production in January, 11 months after it was shut in February 2020 because of technical issues. It began shipments in June 2019.

By Joey Chua

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