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Shell warns of disruptions to
shipments from Prelude FLNG
PROJECTS SHELL warned this week that shipments from its year (tpy) facility – the world’s largest FLNG
Prelude floating LNG (FLNG) project offshore project – entered service in 2020, but then spent
Australia would be disrupted until at least mid- most of 2020 offline owing to electrical prob-
July owing to industrial action relating to a pay lems. At the end of 2021, it went offline again
dispute. following a major power failure, only resuming
Workers on the Prelude facility began 12 days service in April.
of industrial action on June 10 over the pay dis- The pay dispute should prove quicker to
pute. This was followed by a work ban by unions resolve than an operational outage similar to
in the run-up to a vote on a new offer from Shell those previously encountered by Prelude, but
on July 7. nonetheless comes at an unwelcome time given
“We have issued a notice to customers that the upheaval in global gas and LNG markets. It
cargoes will be impacted until at least mid-July also deprives Shell of earnings during a period of
due to the industrial action,” a Shell spokesper- elevated LNG prices.
son told Reuters in an emailed comment. Prelude mostly supplies LNG to North-East
The disruption comes amid an increasingly Asia – mainly South Korea, Japan and Taiwan,
tight LNG market as Europe rushes to secure according to consultancy Rystad Energy. In a
alternative supplies to Russian gas, global market note this week, Rystad said the strike
demand rises and unplanned outages around involved operators stopping work on several
the world add to the pressure. For example, in processes related to the loading of LNG car-
the US, the Freeport LNG terminal recently went goes, which had not slowed down exports so far.
offline following an explosion and has yet to be However, it added that the recent extension of
given permission to restart by 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.
operational challenges. The 3.6mn tonne per
Hoegh, AIE finalise FSRU charter
contract for Port Kembla LNG
PROJECTS HOEGH LNG Holdings said on June 24 that its Hoegh FSRU to a German company.
floating storage and regasification unit (FSRU) Port Kembla LNG is pushing ahead, how-
contract with Australian Industrial Energy ever. The FSRU contract between Hoegh and
(AIE) had been finalised. The deal was struck in AIE covers a 15-year period, with early termi-
November 2021, but AIE had now lifted its final nation options for AIE after the fifth and tenth
objections for the contract to go ahead. years. AIE is entitled to time the start-up of the
Under the deal, the Hoegh Galleon FSRU contract between 2023 and 2025, depending on
will serve the planned Port Kembla LNG import its requirements, Hoegh noted.
terminal in Australia. The facility is expected Hoegh and AIE also said in November that
to be completed in 2023 and represents one of they had agreed to collaborate on the future
several proposed LNG import projects aimed design and development of a “new generation
at addressing looming gas supply shortages. It FSRU”, capable of receiving clean fuels that can
is the most advanced of the project proposals, be used as part of green energy supply chains.
and indeed is at an advantage because FSRUs are They would kick this off by starting initial feasi-
now more difficult to secure given that they are bility work on the design shortly after announc-
in higher demand as Europe pivots away from ing the collaboration. The final design had yet
Russian gas. to be confirmed at the time, but the vessel was
Earlier this year it emerged that other Austral- expected to have the capability of delivering both
ian LNG import project developers could strug- natural gas and green hydrogen or derivatives
gle to secure FSRUs before they are snapped up thereof, according to AIE. This is anticipated
by European companies. Indeed, Viva Energy, to create opportunities for the Port Kembla ter-
which is aiming to build an LNG import ter- minal to support a future hydrogen industry in
minal near Melbourne, was recently reported Australia.
to have lost its tentative booking for a separate
P10 www. NEWSBASE .com Week 27 08•July•2022
