Shell resumes the shipments of gas from their colossal floating structure, Prelude, after a technical disruption dating a year.

Royal Dutch Shell, the multinational oil and gas company also known as Shell, has resumed shipments of gas from their ‘world’s largest floating structure’ which has had technical disruptions costing a year-long pause. This will be a much-welcomed boost for Shell as the prices of LNG (Liquefied Natural Gas) increase following the Asia colds.

Prelude was planned to be the flagship project for floating LNG technology as their facilities used remote offshore fields instead of on onshore facilities to liquefy the gas into a LNG which is in high demand in Asia’s energy market. This means that shipments of can be sent out directly from the platform without the need to be processed onshore.

Unfortunately, the disruption which caused the project to go on pause has knocked the confidence of others within the industry to utilise the floating LNG technology and challenges continue to surface regarding construction and costs causing future floating LNG projects to be cancelled.

Although costs have not been officially released, analysts estimate that the cost of this project could be as much as $13 billion and Shell has also reported $9 billion on impairment costs on Australian gas assets. This is a costly project for the company and its stakeholders such as Japan Inpex (17.5%), Korea Kogas (10%), and Taiwan OPIC (5%).

Neil Beveridge, an analyst from Bernstein, has said:

“Prelude has been a ‘white elephant’ — we always felt it was a technology looking for a solution rather than the other way round”