(EnergyAsia, May 27 2011, Friday) — In announcing its decision to build the world’s first floating liquefied natural gas (FLNG) terminal, Royal Dutch Shell plc will also be laying claim to developing the biggest water-borne structure in history.

The 448-m-long ‘Prelude FLNG’ facility, to be anchored 200 km off the Australian coast, will be constructed from 260,000 tons of steel, around five times more than was used to build the Sydney Harbour Bridge. When fully equipped and with its storage tanks full, it will weigh around 600,000 tonnes, roughly six times as much as the largest aircraft carrier.

Shell said it will soon begin detailed design and construction work at a shipyard in South Korea.

Designed to withstand the severest Category 5 cyclones, the facility will produce gas from offshore fields, and liquefy it onboard by cooling.

Ocean-going LNG carriers will offload liquefied gas, chilled to minus 162 Celsius and shrunk in volume by 600 times, and other products, directly from the facility out at sea for delivery to markets worldwide. Until now, the liquefaction of offshore gas has always involved piping the gas to land-based plants.

Shell said it has accelerated work on the project, and expects to begin LNG production some 10 years after the 2007 discovery of gas reserves in the Prelude field in the Browse Basin located 475 km north-northeast of the town of Broome in Western Australia state.

Shell plans to initially pipe gas from seven subsea wells at Prelude to the FLNG facility, tapping around three trillion cubic feet equivalent of natural gas. The company also expects to produce 110,000 barrels of oil equivalent per day from the field.

Shell said the FLNG facility will stay moored at the Prelude gas field for 25 years, and expects it to also produce from other fields in the area where the company has an interest.

Malcolm Brinded, Shell’s executive director (Upstream International), said:

“Our innovative FLNG technology will allow us to develop offshore gas fields that otherwise would be too costly to develop. Our decision to go ahead with this project is a true breakthrough for the LNG industry, giving it a significant boost to help meet the world’s growing demand for the cleanest-burning fossil fuel.

“FLNG technology is an exciting innovation, complementary to onshore LNG, which can help accelerate the development of gas resources.”

“Our ambition is to develop more FLNG projects globally. Our design can accommodate a range of gas fields, and our strategic partnership with Technip and Samsung should enable us to apply it progressively faster for future projects. We see opportunities around the world to work on other FLNG projects with governments, energy companies and customers.”

 Ann Pickard, chairperson of Shell in Australia, said: “This will be a game changer for the energy industry. We will be deploying this revolutionary technology first in Australian waters, where it will add another dimension to Australia’s already vibrant gas industry.”

Shell said its decision to invest in the FLNG facility culminates more than a decade of research and development. It builds on the company’s extensive know-how in offshore production, gas liquefaction, LNG shipping, and delivering major projects that integrate the gas value chain from wellhead to burner.