Page 10 - GLNG Week 49 2021
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GLNG                                         AUSTRAL ASIA                                              GLNG


       Prelude FLNG operations




       suspended following fire




        PROJECTS &       ROYAL Dutch Shell suspended operations at its  world’s largest FLNG project, and its complexity
        COMPANIES        Prelude floating LNG (FLNG) facility offshore  has contributed to a string of operational issues
                         Western Australia after a fire broke out on the  since it entered service in 2019. The facility was
                         vessel last week.                    offline from February 2020 to January 2021, with
                           Media cited company spokespeople as say-  that shutdown also initially attributed to electri-
                         ing that smoke in an electrical utility area had  cal issues.
                         triggered the automatic fire detection and man-  Prelude has had six months of uninterrupted
       Prelude is the world’s   agement system at the facility on December 2,  production since its last outage, and consultancy
       largest floating LNG   allowing the fire to be contained. However, the  EnergyQuest said that the third quarter of this
       project.          incident resulted in the loss of main power, forc-  year was the project’s best ever. During the quar-
                         ing Prelude’s operations to be suspended.  ter, 11 cargoes were shipped from the facility,
                           Staff were evacuated from the vessel, which  comprising a total of 827,000 tonnes of LNG
                         has been running on backup power from  and accounting for 91% of Prelude’s nameplate
                         December 3, with only a skeleton crew left on  capacity. However, the latest incident comes as a
                         board. As of December 7, Prelude’s main power  new blow for the challenging project.
                         supply and operations had yet to be restored, and   The Prelude outage comes after another pro-
                         no estimate had been provided for the length of  ject in Western Australia, the Chevron-led Gor-
                         the outage.                          gon, saw its third train go offline for repairs after
                           Argus Media cited market participants as  its first train had also been shut down for repairs
                         saying one cargo could be cancelled and another  and then returned to service. (See GLNG Week
                         delayed as a result of the shutdown, but for now  48) Market participants cited by Argus have
                         the impact remains unknown.          estimated that around 2-3 cargoes from Gorgon
                           The 3.6mn tonne per year (tpy) Prelude is the  could be lost as a result of the outages there.™



       Santos-Oil Search merger



       clears final hurdles





        PROJECTS &       THE merger between Santos and Oil Search has  oil and gas companies in the world.
        COMPANIES        cleared its final hurdles and become effective   A small number of Oil Search shareholders
                         after receiving approval from Papua New Guin-  opposed the merger because they said it under-
                         ea’s (PNG) Securities Commission and National  valued the company’s assets, but this was not
                         Court of Justice. In the same week, over 95% of  enough to stop the vast majority from back-
                         Oil Search shareholders voted in favour of the  ing the deal. Indeed, Oil Search’s independent
                         merger, despite opposition from a small minor-  adviser found last month that the merger ratio
                         ity of long-standing investors in the company.  may undervalue the company’s contribution
                           Santos’ AUD8.8bn ($6.2bn) takeover of Oil  to the new entity, but nonetheless concluded
       The merger makes   Search makes Santos the largest shareholder in  the tie-up was in Oil Search shareholders’ best
       Santos the largest   the PNG LNG scheme – PNG’s biggest resource  interest.
       shareholder in PNG   project – and therefore required approval from   Oil Search shareholders will own around
       LNG.              the country.                         38.5% of the merged entity and Santos share-
                           After the court approved the merger, it  holders will own roughly 61.5%.
                         became legally effective as of December 10, with   However, Oil Search’s acting CEO, Peter
                         implementation anticipated around a week later.  Fredricson, said in November that the compa-
                           As well as PNG, the combined company  ny’s board continued to believe that the under-
                         will have operations in Australia, Timor-Leste  lying value was “just one part of the equation”.
                         and North America. It will have a resource  According to him, Oil Search would have faced
                         base of 4.9bn barrels of oil equivalent and pro-  significant challenges in funding growth plans
                         duction of around 116mn boe in 2021. The  in Papua New Guinea and Alaska without the
                         combined company’s market capitalisation  merger.
                         will be roughly AUD21bn ($15bn), which   Oil Search’s shareholders have now backed
                         Santos says would make it one of the 20 largest  this view.™



       P10                                      www. NEWSBASE .com                      Week 49   10•December•2021
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