Page 10 - AsianOil Week 26 2022

AsianOil OCEANIA AsianOil

Shell warns of disruptions to

shipments from Prelude FLNG

PERFORMANCE SHELL warned this week that shipments from its operational challenges. The 3.6mn tonne per
Prelude floating LNG (FLNG) project offshore year (tpy) facility – the world’s largest FLNG
Australia would be disrupted until at least mid- project – entered service in 2020, but then spent
July owing to industrial action relating to a pay most of 2020 offline owing to electrical prob-
dispute. lems. At the end of 2021, it went offline again
Workers on the Prelude facility began 12 days following a major power failure, only resuming
of industrial action on June 10 over the pay dis- service in April.
pute. This was followed by a work ban by unions The pay dispute should prove quicker to
in the run-up to a vote on a new offer from Shell resolve than an operational outage similar to
on July 7. those previously encountered by Prelude, but
“We have issued a notice to customers that nonetheless comes at an unwelcome time given
cargoes will be impacted until at least mid-July the upheaval in global gas and LNG markets. It
due to the industrial action,” a Shell spokesper- also deprives Shell of earnings during a period of
son told Reuters in an emailed comment. elevated LNG prices.
The disruption comes amid an increasingly Prelude mostly supplies LNG to North-East
tight LNG market as Europe rushes to secure Asia – mainly South Korea, Japan and Taiwan,
alternative supplies to Russian gas, global according to consultancy Rystad Energy. In a
demand rises and unplanned outages around market note this week, Rystad said the strike
the world add to the pressure. For example, in involved operators stopping work on several
the US, the Freeport LNG terminal recently processes related to the loading of LNG car-
went offline following an explosion and goes, which had not slowed down exports so far.
has yet to be given permission to restart by However, it added that the recent extension of
regulators. the strike included a harsher stance by operators
For Prelude, the latest development repre- to stop even more important processes, which
sents yet another setback following a series of could cause a “noticeable” disruption.™

Hoegh, AIE finalise FSRU charter

contract for Port Kembla LNG

PROJECTS & HOEGH LNG Holdings said on June 24 that its to have lost its tentative booking for a separate
COMPANIES floating storage and regasification unit (FSRU) Hoegh FSRU to a German company.
contract with Australian Industrial Energy Port Kembla LNG is pushing ahead, however.
(AIE) had been finalised. The deal was struck in The FSRU contract between Hoegh and AIE
November 2021, but AIE had now lifted its final covers a 15-year period, with early termination
objections for the contract to go ahead. options for AIE after the fifth and tenth years.
Under the deal, the Hoegh Galleon FSRU AIE is entitled to time the start-up of the con-
will serve the planned Port Kembla LNG import tract between 2023 and 2025, depending on its
terminal in Australia. The facility is expected requirements, Hoegh noted.
to be completed in 2023 and represents one of Hoegh and AIE also said in November that
several proposed LNG import projects aimed they had agreed to collaborate on the future design
at addressing looming gas supply shortages. It and development of a “new generation FSRU”,
is the most advanced of the project proposals, capable of receiving clean fuels that can be used
and indeed is at an advantage because FSRUs are as part of green energy supply chains. They would
now more difficult to secure given that they are kick this off by starting initial feasibility work on
in higher demand as Europe pivots away from the design shortly after announcing the collabo-
Russian gas. ration. The final design had yet to be confirmed
Earlier this year it emerged that other Aus- at the time, but the vessel was expected to have
tralian LNG import project developers could the capability of delivering both natural gas and
struggle to secure FSRUs before they are snapped green hydrogen or derivatives thereof, according
up by European companies. Indeed, Viva to AIE. This is anticipated to create opportunities
Energy, which is aiming to build an LNG import for the Port Kembla terminal to support a future
terminal near Melbourne, was recently reported hydrogen industry in Australia.™

P10 www. NEWSBASE .com Week 26 01•July•2022