Page 7 - AsianOil Week 42

AsianOil ASIA-PACIFIC AsianOil

Separately, Royal Dutch Shell is struggling to Sempra did not provide further details of
restart operations at the Prelude floating LNG when full output at Cameron was expected to
(FLNG) project, which went offline in February resume. However, Argus Media cited term cus-
owing to an electrical trip and has not exported tomers as saying this week that production had
any cargoes since. Prelude is the largest FLNG restarted on October 11 at the second train, with
project in the world, as well as the biggest off- Trains 1 and 3 anticipated back online around
shore facility ever built. The challenges Shell has October 13-14 and October 21 respectively.
faced in trying to return the facility to service
illustrates its complexity. The super-major began What next?
to restart operations in early September but just These outages may actually be viewed as welcome
days after it re-opened subsea wells for the first by the LNG industry more broadly as it continues
time in seven months, it had to suspend gas flows to grapple with oversupply, which buyers are strug-
to the vessel again. This was attributed to a seal gling to absorb. Indeed, talk of the outages in Aus-
leaking in the turret that connects the Prelude tralia in particular helping to prop up Asian LNG
facility to equipment on the seabed. prices has been ongoing for some time.
In a brief October 15 update, Shell said that However, the weather is likely to play a more
it continued to work through the process for significant role than plant outages in pushing
restarting Prelude, but that it did not expect full prices up. This week, reports emerged that spot
production at the facility to resume before the LNG cargoes for delivery to Northeastern Asia
end of the year. in November were averaging $5.50 per million
“Prelude is a multi-decade project, and our British thermal units ($152.13 per 1,000 cubic
focus is on delivering sustained performance metres). This is the highest price for LNG to be
over the long term,” the super-major stated. It has seen so far this year. And while various plant out-
also clarified to media that it is only the process ages and hurricane-related disruption on the US
for the hydrocarbons restart that has begun, and Gulf Coast are thought to be helping, the main
not LNG production. factor is thought to be the coming winter, which
is forecast to be a cold one.
Bouncing back European gas prices, too, have recovered to
In the US, meanwhile, Cameron LNG had levels not seen since late 2019.
only just resumed exports after being shut While there are concerns that the upcoming
down by Hurricane Laura in late August, winter – the time of year when people are most
only to have to go offline again as Hurricane vulnerable to seasonal flu viruses – will also
Delta made landfall on the Louisiana coast. result in new waves of coronavirus (COVID-19)
Operator Sempra Energy reported on Octo- infections, a period of extreme cold will be wel-
ber 12, however, that no damage had been come news for the LNG industry. Indeed, during
sustained from the latest storm, and that a period of otherwise unprecedented turmoil, a
it had been determined that it was safe to cold winter could provide some much-needed
restart production at the plant. normality to LNG producers.™

Week 42 22•October•2020 www. NEWSBASE .com P7