World’s largest 'ship', which is bigger than the Empire State Building
As Prelude leaves dry dock for the first time, developer Royal Dutch Shell wants to consolidate its advantage as the first mover in floating liquefied natural gas – an as-yet untried technology for which Prelude will be the flagship.
The oil company’s technicians are designing something even larger and tougher than Prelude, a vessel that will need to last 25 years moored in the Indian Ocean’s ‘cyclone alley’ off Australia’s northwest coast.
‘Yes we will move bigger and move into more extreme environments,’ said Bruce Steenson, Shell’s general manager of integrated gas programmes and innovation.
‘We are designing a larger facility. That will be the next car off the rails.’
Prelude, which analysts says may cost over £7billion ($12bn) to build, is a potential game changer for the oil and gas industry.
If it is an economic success, gas fields worldwide that are too far out to sea and too small to develop any other way could become viable for LNG production.
The prototype vessel’s most likely first copy model of similar size will now be for the Browse project – another venture for gas off Australia.
Escalating costs forced backers to dump their original, land-based LNG plant plans, and in September this year, they decided to go ahead with Shell’s FLNG technology instead.
‘The Browse structure will be 90 per cent the same as Prelude,’ said Steenson – citing the ‘design one, build many’ mantra Shell hopes will eventually pay off and placate shareholders worried about the firm’s total $45billion-a-year capital spending bill.
Browse’s developer, Woodside Petroleum, said in October it may use as many as three of the FLNG vessels that Shell is developing along with Samsung Heavy and oil and gas engineers Technip.
An even bigger FLNG plant than the ones to be built for Prelude and Browse could make life more interesting for the competition.
A wide range of land-based ‘wannabe’ LNG exporters in Canada, Russia and east Africa all hope to tap the burgeoning Asian gas demand in the same way a number of Australian and U.S-based LNG developments will be doing over the coming few years.
Anchored about 125 miles off the Australian coast, Prelude will chill the gas to reduce its volume by a factor of 600 and load it on to specialised LNG tankers.
Prelude will only produce about 3.6 million tonnes a year (mtpa) of LNG along with its 5.3 mtpa of liquids and other hydrocarbons – a fraction of some land-based LNG plants.
Steenson envisages a bigger version could produce far more – giving it economies of scale closer to those to be enjoyed by bigger land-based producing plants such as Gorgon, a 15.6 mtpa plant taking shape on northwest Australia’s coast to tap offshore gas.
Gorgon, led by Shell’s US-based rival Chevron, should be producing in early 2015, well ahead of Prelude, but it is way over budget and now scheduled to cost £31billion ($52bn) against an original £23billion ($37bn).
Plans for a land-based Browse plant were cancelled this year as its likely cost reached £27billion ($45bn), and the outlook for global gas demand faltered.
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