Shell to Launch Floating LNG Plant

Royal Dutch Shell (RDS.A) today said that it plans to develop two of its offshore Australian gas fields using its floating liquefied natural gas (FLNG) production technology. This technology is a method of cheaper and quicker development of offshore gas reserves. 

Under the FLNG technology, producers won’t have to build onshore LNG plants or set long gas pipelines under the sea. Shell has 100% working interest in both the Prelude and the Concerto fields. These fields will be developed one after another. 

The Prelude FLNG project is now in the front end engineering and design phase of development. This field has 2.5 trillion to 3 trillion cubic feet of gas and about 120 million barrels of condensate. The company is expected to underpin an LNG plant with an annual capacity of 3.5 million tons. Shell has a history of innovation on the technology front. 

The company has been significantly investing in both field as well as product developments. Pioneering developments include the development of gas-to-liquids (GTL) technology, which produces a cleaner liquid fuel derived from natural gas. 

However, we are concerned about the company’s proiduction outlook. Production had declined approximately 2% in 2008. This was despite sizeable contributions from a number of projects that came on-stream during the year.

Read the full analyst report on RDS.A