Page 11 - AsianOil Week 38 2022

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Shell Prelude FLNG resumes production

after expensive strike

PIPELINES & SHELL has announced the restart of production An enterprise agreement was reached by Shell
TRANSPORT at its Prelude FLNG vessel in the Browse Basin, and the Australian unions on August 23 with
offshore Western Australia, after a strike put a the support of more than 90% of the workers.
Prelude is one of the halt to shipments of LNG cargoes for more than Shell told international media that an enterprise
largest FLNG vessels in two months. Industrial action taken by workers agreement had been supported by a majority of
operation. on board the vessel brought production to a halt employees in a formal vote and is expected to
in July, ending with a new agreement between come into effect in early October 2022. “We are
Shell and the unions in late August. focused on moving forward as a business and
The Prelude is one of the largest FLNG vessels delivering affordable, reliable energy to our cus-
in operation with a capacity to produce 3.6mn tomers through continued safe, stable produc-
tonnes per year, although it sometimes does not tion in order to meet the critical global demand
reach that volume. It is also designed to produce for energy security,” Shell said.
1.3mn tpy of condensate and 400,000 tpy of The strike came at a time when LNG demand
LPG. The Prelude was positioned in some 250m is at a peak as Europe seeks to find alternatives
of water in late December 2017 and started pro- to Russian gas in the wake of sanctions against
duction a year later. It processed its first hydro- the country for its invasion of Ukraine and coun-
carbons in June 2018 and shipped its first cargo ter-measures by Moscow, which has now closed
in June 2019. Shell holds a 67.5% interest in the the Nord Stream 1 pipeline.
vessel, with Japan’s INPEX holding 17.5%, South The halt in shipments from the Prelude
Korea’s KOGAS with 10% and Taiwan’s CPC affected Australia’s overall output for the period,
with 5%. with Argus reporting that Australian LNG
According to a statement issued by the Off- exports had declined to a three-month low of
shore Alliance, which represents workers in the around 6.5mn tonnes, compared with 7mn
Maritime Union of Australia and the Austral- tonnes in July 2021. Most of Australia’s LNG
ian Workers Union, negotiations between the exports are delivered to Asian ports.
employees and Shell were held over the course Meanwhile, while LNG remains a hot com-
of two years, with industrial action lasting modity on the global markets, Australia’s East
some 76 days. The OA said the halt in produc- Coast is seeing a rise in demand for gas, which
tion had cost Shell “an estimated $1.5 bn in lost could mean that some exports may be curtailed
production.” in order to meet domestic demand. ™

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