MELBOURNE, July 3 -- Royal Dutch Shell PLC has issued a formal invitation to three consortia to tender for the front-end engineering and design plus engineering, procurement, and construction of a 3.5 million tonnes/year floating LNG facility. The likelihood is that Shell will use the facility to develop its Prelude gas find in the Browse basin off Western Australia. Prelude has estimated reserves of 1-2 tcf of gas.
Shell's parameters for the facility include a cyclone-tolerant design with dimensions of 450 m long and 75 m wide.
Without naming the consortia, Shell said the three groups consist of engineering and shipyard contractors selected after a prequalification exercise it conducted earlier this year. Bids for the contract are expected by yearend with contract award to be made probably during 2009.
Shell flagged the Prelude destination during the Australian Petroleum Production and Exploration Association (APPEA) Conference in Perth in April.
The vessel will not be the first floating LNG plant in the world. Norway's Flex LNG already has under construction in South Korea ships that incorporate liquefaction units. Flex has signed agreements with Rift Oil to develop Rift's onshore gas reserves in PNG via a pipeline to an offshore facility stationed in the Papuan Gulf.
Flex LNG also has signed an agreement with Mitsubishi and Peak Petroleum Industries Nigeria to jointly develop and market the world's first floating LNG project off Nigeria. The Flex units are designed to a production capacity of 1.5 million tonnes/year of LNG.