Global LNG Outlook: Shell Finalising Works on Prelude LNG

Friday, 20 October 2023

Shell is on track to finalise its maintenance work at the Prelude LNG facility by the middle of November, according to Reuters’ reports on 19th October.??

The renowned British energy giant started works on the expansive floating LNG plant, capable of handling 3.6 million metric tonnes per annum, back in August.??

In a statement made by a senior Shell executive in September, it was described as a "major turnaround" set to span approximately two months.?

The extension of the timeline to mid-November is due to the discovery and subsequent rectification of various new issues.??

The facility's last cargo departure was on the 19th of August.??

In response to the ongoing maintenance activities, a spokesperson from Shell said, "Shell routinely conducts maintenance at all its facilities as necessary to ensure their sustained safe and reliable operation over the long term. The turnaround at Prelude commenced in August and is anticipated to persist for several months."?

Prelude, characterised by a deck longer than four soccer fields, made history as the world's inaugural floating LNG facility to incorporate pioneering technology, with an estimated cost exceeding $12 billion.?

Positioned approximately 475 kilometres (around 300 miles) off the western coast of Australia, Prelude has grappled with a series of operational setbacks since its production debut in June 2019.??

It was reported in September that Shell contemplated a year-long closure of the Prelude facility to address the persistent operational issues. Ultimately, the decision was made to opt for a shorter maintenance period instead.?

While the facility itself is located in Australia, it is a major player in the global LNG market, and its maintenance can affect LNG shipments and prices worldwide, including the UK.??

The decision-making process of energy giants like Shell regarding maintenance and operational issues can also have ripple effects on the LNG market, which, in turn, can influence the UK's energy landscape and market dynamics.?