Rick Wilkinson
OGJ Correspondent
MELBOURNE, Nov. 12 -- Shell Australia has received environmental approval from the Australian government for its proposed Prelude floating LNG (FLNG) project in the Browse basin off Western Australia.
However, Environment Minister Tony Burke has imposed strict conditions on the development.
Burke commented that although there would be significant economic benefits from Prelude, it is a world-first technology and the government could not risk getting it wrong. He has imposed strict conditions to protect the marine environment.
Shell will have to develop an oil-spill contingency plan to the government’s satisfaction that outlines how the company will minimize the risk of oil spills while also minimizing the environmental impact in the event of a spill.
If a spill did occur, Shell will foot the bill for environmental rehabilitation. The company also will have to develop a greenhouse-gas strategy that is transparent and publily available.
Shell will need to establish measures to reduce pollution caused by lights on the vessels involved offshore, address noise impacts, manage introduce introduced marine pests, and minimize waste.
The company will need to submit and environment performance report that details how it has adhered to the approved plans and strategies and this report will be made public.
Burke added that his Environment Department would have the power to conduct a project audit at any time to ensure Shell is complying with the approval conditions.
Shell says its FLNG technology reduces the project’s cost and its environmental footprint because it removes the need for offshore platforms, pipelines to shore, nearshore dredging and jetty construction and onshore plant and infrastructure development.
The proposed Prelude project includes development of the Prelude and Concerto gas-condensate fields in Shell’s WA-371-P permit.
Estimated reserves for Prelude are 2.5-3 tcf of gas and about 120 million bbl of condensate. The company has yet to publicly announce Concerto reserve estimates.
The planned development will be capable of producing 3.5 million tonnes/year of LNG along with total liquid production (LPG and condensate) in excess of 5 million tpy.
Shell expects to make a final investment decision on the project early next year. It would then be a further 5 years for the planned 600,000-tonne FLNG vessel to be built in South Korea and towed to the field which lies 475 km north-northeast of Broome on the Kimberley coast.
The production will initially be through eight subsea wells. Development drilling would begin in 2013 with wells drilled to depths of 5,400 m and tied back to subsea manifolds and connected via flowlines to the FLNG.
All going to plan, Shell expects to begin commissioning in 2015 and produce its first shipments of LNG in 2016.
