PERTH, Apr. 8 -- Shell Australia is considering a $2.1 billion (Aus.) floating LNG facility at its Prelude gas field in the Browse basin off Western Australia.
The company believes the time has come for development of relatively small gas fieldsthose having reserves of less than 5 tcf of gasusing the radical floating facility approach as opposed to the conventional fixed platform with pipeline to shore.
For the Prelude discovery, which lies about 450 km north of Broome on the Kimberley coast of Western Australia, a pipeline to shore could cost more than $3 billion.
The Shell find, made last year in the permit adjacent to Inpex's Ichthys field, was once thought to be an extension of the Ichthys structure. Speaking Apr. 7 at the Australian Petroleum Production & Exploration Association Conference in Perth, Royal Dutch Shell PLC's Linda Cook, executive director of gas and power, denied that, saying Prelude is a separate structure with a reserve of about 2-3 tcf. This is the type of project that would suit a floating LNG development.
Such a project would avoid the environmental sensitivities of bringing gas ashore on the pristine Kimberley coast where competing projects have prompted the Western Australian and federal governments to research a single gas production hub to reduce the environmental impact on the region.
Cook said it was still early in the proposal's evaluation, but Shell believes the floating LNG technology has potential in both Australia and Asia.
Shell has lodged an environmental review application with the Australian government for the Prelude project, which it says could be in production by 2012.
The company says it expects to issue a tender for the building of the first of its floating LNG vessels in the third quarter.