The mooring chains for Shell’s giant Prelude FLNG have all been connected, marking the completion of the first phase of her installation and commissioning.
Prelude was built at the Samsung Heavy Industries yard in Geoje, South Korea, and was partially commissioned prior to her departure. She is the largest floating offshore facility ever built and is among the world's largest vessels by displacement. Three tugs towed Prelude to her permanent location off the northwest coast of Australia, where she will process, liquefy, store and offload natural gas for export. At full capacity she will produce about 3.5 million tonnes per annum of LNG.
Commissioning is expected to take nine months to a year, and will involve up to a dozen support vessels at a time, including offshore tugs, PSVs and subsea construction ships. Shell says that a team of 800 people are involved in this phase of the project, much more than the 120-140 crewmembers that Prelude will require for normal operations. The firm has contracted a 650-bed semisubmersible floatel, the POSH Arcadia, to provide the berthing for the extra staff.
Prelude will be the second FLNG to enter operation after Petronas' PFLNG Satu. In addition to her record-setting size, she is among the most expensive vessels ever built, and her plant is much more capital-intensive per tonne of capacity than the latest onshore liquefaction trains.
However, with the spot price of LNG much lower than in years past, analysts say that Prelude will be an important test of the economic viability of the concept. Onshore plants have room to sprawl, but the same equipment must be packed into a tight space if installed on a ship, adding complexity and raising cost. In a market environment that has created difficulty even for onshore LNG proposals, Shell has chosen not to exercise its options for three more FLNGs.
Still, other oil and gas firms (notably Eni and Ophir Energy) are looking at the technology as a way to exploit stranded gas reserves. For remote offshore fields, an FLNG may be more cost-competitive than an export pipeline. "With an abundance of low-cost gas in the U.S. and relatively cheap construction costs [onshore], there is less need for FLNG other than in niche situations," said Neil Beveridge, an analyst for Bernstein, speaking to the FT.