Heavy Lift Specialist
Dec 052013

Royal Dutch Shell PLC says it has completed building the hull of the world’s largest floating facility, which has been constructed to process natural gas off the coast of western Australia.

prelude-3Asia LNG buyers come together in bid to secure lower prices

An uncomfortable prospect for global exporters of liquefied natural gas (LNG) will unfold this week — buyers from countries that import 70% of the world’s LNG will meet to discuss how to get a better deal. Keep reading. Keep reading.

Shell said Tuesday that the 488-meter (1,600 foot) hull of the structure, known as “Prelude,” was floated out of the dry dock in Geoje, South Korea where it is being built.

With a bow and stern half a kilometre apart, four football pitches would fit on the vessel’s deck were it not for a clutter of kit towering up to 93 metres high that will take in the equivalent of 110,000 barrels of oil per day in natural gas and cool it into liquefied natural gas for transport and sale in Asia. It will float above gas fields.

fp1204_prelude_vs_buildings_940_abShell says it can remain in place through a category 5 cyclone.

Construction began last year, three years after the project was announced. Gas production is slated to begin in 2017.

“Yes we will move bigger and move into more extreme environments,” Bruce Steenson, Shell’s general manager of integrated gas programmes and innovation told Reuters last week. “We are designing a larger facility … That will be the next car off the rails.”

prelude-4By the numbers

  • More than 600 engineers worked on the facility’s design options
  • 4 soccer fields, laid end to end, would be shorter than the facility’s deck
  • 175 Olympic-sized swimming pools could hold the same amount of liquid as the facility’s storage tanks
  • 50 million litres of cold water will be drawn from the ocean every hour to help cool the natural gas
  • More than 260,000 tonnes of steel will be fabricated and assembled for the facility.  (5X steel used to build the Sydney Harbour Bridge)
  • There will be over 3,000 kilometres of electrical and instrumentation cables on the FLNG facility, the distance from Barcelona to Moscow
  • At peak levels, around 5,000 people will be working on the construction of the FLNG facility in South Korea
  • Another 1,000 will build the turret mooring system, subsea and wells equipment in other locations across the globe
  • It will remain permanently moored at the location for around 20-25 years before needing to dock for inspection and overhaul

Financial Post Staff

prelude-1Prelude, which analysts says may cost over $12 billion to build and which is due to be producing by 2017, 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.

Making the first-ever FLNG unit even more of a focus as it takes shape in Samsung Heavy Industries’ Geoje shipyard in South Korea, 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.

prelude-6Escalating 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 percent the same as Prelude,” Steenson told Reuters on the sidelines of a conference, citing the “design one, build many” mantra Shell hopes will eventually pay off and placate shareholders worried about the firm’s total $45 billion-a-year capital spending bill.

Browse’s developer, Woodside Petroleum, said in October it may use as many as three of the FLNG vessels 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 hoping to tap burgeoning Asian gas demand the same way a number of Australian and U.S-based LNG developments will over the coming few years.

Anchored about 200 km (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.

Shell’s earliest FLNG designs were made in the 1990s but ended up shelved because of economic recession and technical difficulties. Shell started looking again at the idea in the early 2000s, but it was the discovery of the Prelude field in 2007 – too small and too remote to develop any other way – that gave the technology its first shot in the real world.

A final investment decision was taken to go ahead with 488-metre long Prelude in 2011. Its keel was laid in May this year and two giant sections of its hull built on opposite sides of the harbour were joined together in the summer at Geoje Island.

As was the case with the pioneering design, the bigger FLNG vessel design awaits a suitable gas discovery to match it, Steenson said at the London Business School’s annual global energy summit.

SOURCE: FinancialPost