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Shell's Australian FLNG Timed for 2016 Start-up

15 October 2009

Royal Dutch Shell PLC does not expect to start production from its proposed floating LNG (FLNG) project in the Browse basin off Western Australia until at least 2016, according to the company's draft environmental impact statement.

Although the front-end engineering and design process (contracted to Technip SA of France and Samsung Heavy Industries of South Korea) has begun, Shell does not expect to make a final investment decision until early 2011.

The $5 billion, 600,000-tonne FLNG facility is expected to take 5 years to build.

Meanwhile, Shell intends to drill eight subsea production wells on its Prelude and Concerto gas discoveries in the Browse basin 475 km north-northeast of Broome. Development drilling is scheduled to begin in 2013 and take 2 years. The wells will be tied back to subsea manifolds before being connected to the FLNG vessel via flowlines and riser.

The vessel tow from the South Korea construction yard (Technip and Samsung also have the contract to build the FLNG), along with installation and hook up, will take about 6 months, with commissioning in the late 2015 before first production the following year.

Production is estimated to comprise 3.6 million tonnes/year of LNG, 1.3 million tpy of condensate, and 400,000 tpy of LPG.

Shell says the offshore project will have a low environmental footprint on its location away from migration paths for whales and turtles that seasonally pass up and down the Western Australian coast.

The FLNG project will come on stream after the company's proposed onshore coal seam gas-LNG project at Gladstone, Queensland, in joint venture with Arrow Energy begins production in 2014.