London - It will be the biggest thing ever sent to sea, but as the Prelude floating liquefied natural gas (FLNG) vessel was launched yesterday, plans are already under way for something bigger.
With a bow and stern half a kilometre apart, four football pitches would fit on Prelude’s deck were it not for a clutter of kit towering up to 93m high that will draw gas from under the sea bed for dispatch to Asia by the boatload.
Now, as the partly built structure floats out of dry dock for the first time, developer Royal Dutch Shell wants to consolidate its advantage as the first mover in FLNG – 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, producing enough gas to supply a city the size of Hong Kong.
“Yes, we will… move into more extreme environments,” Bruce Steenson, Shell’s general manager of integrated gas programmes and innovation, said last week. “We are designing a larger facility.”
Prelude, which analysts say may have cost more than $12 billion (R122bn) by the time it is complete, is due to be producing LNG by 2017.
It 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 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 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 they decided to go ahead with Shell’s FLNG technology instead.
“The Browse structure will be 90 percent the same as Prelude,” Steenson said, citing the “design one, build many” mantra Shell hopes will eventually pay off and placate shareholders worried about the firm’s total $45bn-a-year capital spending bill.
Browse’s developer, Woodside Petroleum, said in October that it might use as many as three of the FLNG vessels Shell was developing along with Samsung Heavy and oil and gas engineer 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 would-be LNG exporters in Canada, Russia and east Africa.
Anchored about 200km 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. It will produce only about 3.6 million tons a year of LNG along with its 5.3 million tons a year 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 million-ton-a-year 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 over budget and now scheduled to cost $52bn against an original estimate of $37bn.
Plans for a land-based Browse plant were cancelled this year as its likely cost reached $45bn, and as the outlook for global gas demand faltered.
Shell has shied away from offering estimates of Prelude's likely cost, but analysts say FLNG could end up less expensive.– Reuters