Page 10 - GLNG Week 41

GLNG COMMENTARY GLNG

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

P10 www. NEWSBASE .com Week 41 16•October•2020