Page 11 - GLNG Week 23

GLNG AUstRAlAsiA GLNG
Shell ships first Prelude LNG cargo
PERfoRmAnCE
RoYAL dutch Shell has shipped the rst LNG from its Prelude FLNG project o shore Aus- tralia’s northwest coast a er a string of technical issues delayed it from 2018.
The cargo was loaded onto the 490-metre long Valencia Knutsen LNG tanker on June 11, with the Anglo-dutch super-major saying that it was bound for customers in Asia, without giving speci cs.
Prelude is projected to produce 3.6 million tonnes per year of LNG, 1.3 million tonnes per year of condensate and 400,000 tonnes per year of LPG when it reaches full capacity. e pro- ject’s partners include Japan’s Inpex, Korea Gas (KoGAS) and Taiwan’s CPC.
“How fast Prelude delivers its second and third cargo and ramps up to plateau output will be a key indicator of success,” Wood Mackenzie analyst daniel Toleman said. While Shell has not revealed the project’s nal price tag, Wood Mac- kenzie estimates it to be around US$17 billion.
e vessel itself was rst installed at the eld two years ago, but has been plagued by mooring issues that undermined e orts to load LNG car- goes last year.
In May 2018, Shell tried to bring the LNG car- rier Gallina alongside Prelude but had to cancel
the operation when the two vessels were just 50 metres apart a er a tug tow rope failed. A second attempt was made a little over a week later, but the Gallina had to be released from its moorings a er another line failure.
e National o shore Petroleum Safety and Environmental Management Authority (NoP- SEMA) said in a report following the incidents that there could have been a “complete moor- ing failure” with “potential for serious conse- quences” if it had occurred during LNG transfer.
Wood Mackenzie analyst Chris Meredith said in May that Prelude’s lengthy delays were unsurprising, adding: “It’s such a novel technol- ogy and an isolated location. It was always going to be di cult.”
Prelude is the world’s biggest FLNG project and was also supposed to be the rst, but was beaten by Malaysian major Petronas’ PFLNG Satu, which launched in 2017. Both vessels are being watched closely by the industry, as their performance will speak to the commercial via- bility of using FLNG projects to monetise remote o shore gas deposits. Africa has taken the lead in proposed FLNG projects, with one under way in Cameroon and two, in Mauritania-Senegal and Mozambique, under construction.™
New PNG energy minister questions LNG deal
PoliCy
PAPUA New Guinea’s (PNG) new prime minis- ter, James Marape, has appointed Kerenga Kua as his energy minister in a move that may unsettle energy investors.
Kua is an outspoken critic of the deal the government signed in April with oil Search, Total and state-owned Kumul Petroleum for the development of the Elk-Antelope and P’nyang o shore natural gas elds. e two elds will underpin the US$14 billion development of two new 2.7 million tonne per year LNG trains at ExxonMobil’s US$19 billion PNG LNG project.
e new petroleum minister has said pre- viously that the project’s legality should be reviewed, which may in turn lead to a renego- tiation of terms. While Marape has said he will abide by existing contracts, if a review suggests the deal has breached the country’s laws then new negotiations seem likely. Marape described Kua as a lawyer who “shared his vision” for reforming the sector and maximising gains for PNG.
“We will come to a position that everyone is comfortable with without disrupting business,” the Australian nancial Revew quoted Kua as
saying, following his swearing in ceremony. “But [we will] ensure there is an equitable distribu- tion of bene ts which come out of these resource projects.”
e move comes as investors in the country try to ride out the wave of uncertainty that has followed former Prime Minister Peter o’Neill’s resignation a er more than seven years in power.
on June 6, oil Search CEo Peter Botten warned that any delay to the Papua LNG pro- ject would see it overtaken by other gas export developments around the world. He said: “We can’t wait too long before our place in the queue slips. e government is aware of this, as is the new prime minister.”
Marape, however, refuted the CEo’s com- ments the next day, saying: “Peter Botten knows me. I’m investor friendly but I also have to win for the 8 million shareholders of this country.”
Some of the terms in the April deal include a provision for domestic gas supplies as well as local content requirements. Kumul Petroleum has also been allowed to defer payment of its share of past costs a er taking a 22.5% stake in the project.™
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