Tuesday, September 26, 2023

Shell conducting brief maintenance at its huge Australian plant – sources

By Ron Bousso, Marwa Rashad and Sudarshan Varadhan

LONDON, September 7 (Reuters) – Shell is considering shutting down its flagship liquefied natural gas (LNG) plant, Prelude, off the coast of Australia for a year to address issues that have affected its operations, but opted to do so instead reduced maintenance time to allow for this, according to three industry sources, to meet strong gas demand.

It is estimated that Prelude, which has a deck longer than four football fields, was the world’s first floating LNG facility using cutting-edge technology and cost more than $12 billion.

The facility, some 475 kilometers off the west coast of Australia, has experienced a series of disruptions since production began in June 2019, including a fire that led to a total blackout in December 2021.

The shorter maintenance program, which began in August and is expected to last two months, will not resolve all design issues, according to sources familiar with the matter.

That means the 3.6 mtpa LNG plant could continue to face operational problems, the sources said.

A Shell executive said Wednesday that Prelude will undergo a major overhaul that will take about two months. Talks about an extensive one-year maintenance had not been reported so far.

Late last year, Shell considered spending a year on repairs on the Prelude to fix a number of design issues, including the electrical system, which the sources said was the cause of a number of breakdowns.

The decision not to undertake the lengthy repairs was partly due to concerns that Shell would take a hit in LNG sales at a time of strong demand, the sources said.

The company chose to conduct the two-month maintenance at a time of relatively weak global LNG demand so the plant could be back online when winter demand begins in the northern hemisphere, including China and Europe.

(Reporting by Ron Bousso; Editing by Nick Macfie, Spanish editing by José Muñoz)

World Nation News Desk
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