Rick Wilkinson
OGJ Correspondent

MELBOURNE, July 8 -- Supply from Shell Australia’s proposed Prelude gas field floating LNG development in the Browse basin off northwestern Western Australia has been included in a new and binding purchase and sale agreement with Japan’s Osaka Gas.

Under the deal, Shell will supply 800,000 tonnes/year of LNG sourced from its global portfolio over 25 years starting in April 2012.

The contract will include gas supplied from Prelude as well as the Gorgon-Jansz LNG project on Barrow Island further south, also off Western Australia.

Prelude development includes the Prelude and nearby Concerto gas fields in Shell’s wholly owned WA-371-P permit.

Prelude has estimated reserves of 2.5-3 tcf of gas along with 120 million bbl of condensate. Reserves for Concerto have yet to be announced.

A final investment decision for Prelude-Concert is expected early in 2011 with first gas expected in 2016.

The 15 million-tpy Gorgon-Jansz project in which Shell has a 25% interest is operated by Chevron Australia. It will come on stream in 2014.

The value of the Shell-Osaka Gas deal has not been disclosed.