Shell Australia signs PSA for Prelude floating LNG project

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.

July 8, 2010

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.