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Shell puts safety ahead of LNG production on Prelude

Peter Milne: The West Australian: 

The Prelude project will be fired up 475 kilometres north-east of Broome, ready to liquefy natural gas straight from the ocean floor and ship it around the world.

Shell’s Prelude floating LNG vessel will come into production when it is safe to do so, and not before, Australia chairwoman Zoe Yujnovich told the Melbourne Mining Club today.

Ms Yujnovich also called for Australia to reconsider a carbon price as she discussed political, economic and social tensions in Australia.

In what may be an attempt to lower expectations about when first production will occur, Ms Yujnovich said the 488m-long giant was simple in concept but complex in execution.

“Our Prelude teams are working around the clock in an involved commissioning process,” she said.

LNG was first loaded onto Prelude last June, and in late December a number of wells were opened to allow gas from the reservoir to flow into the vessel.

“We’re not rushing the process,” she said.

“We’re taking the time to do this safely and remaining in control.”

Ms Yujnovich said Prelude was a multi-decade facility.

“While we all find near-term milestones exciting, the success of Prelude will be measured by delivering sustained performance over a much longer time horizon,” she said.

Condensate is expected to be the first product to be exported with LNG and LPG to follow.

WestBusiness last week reported a series of safety missteps that occurred on Prelude between May and October last year.

In a wide-ranging address Ms Yujnovich called for business leaders to create the right culture in their organisations.

“In Shell, we often say we need to do the right thing, especially when we think no-one is watching, because everybody is always watching,” she said.

She acknowledged the financial pressure people felt from stagnant wage growth, less job security due to the growing casualisation of the workforce and soaring energy bills.

Ms Yujnovich rejected calls for government intervention in the Eastern States gas market where rising wholesale gas prices have pushed up power prices and threatened the future of some manufacturing.

Shell operates the QGC LNG plant in Gladstone, Queensland that is supplied with onshore gas.

She said Shell sought to maintain a strong social licence to operate at a time when social cohesion in Australia looked more fragile than at any time since the Vietnam war.

“People who feel economically marginalised naturally look to things to blame for their predicament,” she said.

“The erosion of public trust in big business mirrors the erosion of trust in political parties and religious institutions.”

Ms Yujnovich said big business was not blameless, citing concerns about executive remuneration and tax paid by companies.

She said government had a role in encouraging lower carbon emissions “perhaps through government-led carbon-pricing.”


Zoe Yujnovich, chairman of Shell Australia and executive vice-president, integrated gas Australia and New Zealand, will be the next guest speaker in The West Australian’s Leadership Matters breakfast series.

Event: Breakfast, 7am (for 7.30am) to 9am

Date: Wednesday, February 27

Venue: Perth Convention and Exhibition Centre’s BelleVue Ballroom

Tickets: $115 (incl GST), corporate tables (10) $1150.

Information: 9482 3820, email [email protected] or go to


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