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You are here: Home News Australia Approves Shell's Giant Floating LNG Plant

Australia Approves Shell's Giant Floating LNG Plant

SYDNEY — Australia Friday gave environmental approval for Shell to install a revolutionary floating liquefied natural gas (LNG) plant which is set to become the world's longest vessel.

Environment Minister Tony Burke gave the green light with conditions aimed at protecting the area, off sparsely populated north-western Australia, from damage including oil spills.

"This is a large-scale project that is using world-first technology. We can't risk getting it wrong, so I have set very strict conditions to help ensure our precious marine environment will be protected," he said.

The under-design structure, the length of five football pitches, will cool gas from Shell's Prelude field into liquid for shipping. The energy source is on track to become a major industry in Australia.

Shell said the floating, ship-shaped structure, which will reportedly cost 5.0 billion US dollars, would be some 480 metres (1,600 feet) long, 75 metres wide and weigh about 600,000 metric tons.

"Deploying our floating LNG technology reduces the project's cost and environmental footprint," said Ann Pickard, chairwoman of the Anglo-Dutch company's Australian wing.

"It removes the need for offshore compression platforms, long pipelines to shore, nearshore works such as dredging and jetty construction, and onshore development such as building roads, laydown areas and accommodation."

A Shell spokeswoman said talks on a production licence were "progressing well" and a final investment decision was expected to be made next year, with the platform scheduled to open in 2016.

She confirmed comments by senior Shell official Malcolm Brinded, who said last year that the plant would be "significantly the largest vessel in the world when it's constructed".

The platform, nearly 50 percent longer than the USS Enterprise aircraft carrier, is being designed by France's Technip and will be built by South Korea's Samsung, who are contracted for "multiple" editions.

The plant will be towed to each spot and temporarily anchored to the seabed. Reports said it would be designed to withstand extreme weather such as a one-in-10,000-year cyclone.

Although the technology is commercially untested, the project would have the capacity to produce about 3.5 million tonnes of LNG per year, as well as liquefied petroleum gas over its 20-year lifespan.

The development is particularly relevant for Australia which is believed to have stranded gas reserves worth about 1.0 trillion Australian dollars (890 billion US).

"By reducing the cost of a development, floating LNG can provide a means of developing smaller and more remote offshore gas resources that may otherwise stay in the ground," a Shell statement said.

Western Australia is the centre of Australia's booming LNG industry which some analysts believe is on course to rival Qatar, the world's biggest producer.

Burke also said Shell would also have to address greenhouse gas, light and noise pollution and would pay for any damage caused by spills, following a major leak from a Thai-owned offshore oil rig off northern Australia last year.

Shell this year sealed a joint takeover of Australian coal-seam gas company with PetroChina. It is also a joint venture partner in the Timor Sea's Greater Sunrise project, along with Woodside, ConocoPhillips and Osaka Gas.

The consortium has also suggested a floating platform for the project, but has met with stiff resistance from East Timor's government, which prefers an onshore facility.

Shell's spokeswoman said called the Prelude plant "the first cab off the rank", while one for Greater Sunrise was "potentially the second".

"I'm sure once it's done and dusted, people will feel a lot more comfortable," she said, referring to the first floating plant.

"You might expect to see a few other people being willing to invest."

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