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Significant risk to the health and safety of persons at the Shell Prelude FLNG Facility


In a letter dated 16 March 2020 to the Australian National Offshore Petroleum and Environmental Management Authority (NOPSEMA), Shell Australia Pty Ltd sought an extension of time for compliance with NOPSEMA General Direction ID 780 in relation to dangerous occurrences at the Prelude FLNG Facility

NOPSEMA agreed in its reply letter dated 20 March to “revise the due date for Direction 2 to 31 May 2020 to provide additional time for Shell Australia Pty Ltd (Shell) to fully comply with the directions, due to extenuating circumstances associated with measures put in place to mitigate the spread of the COVID-19 virus.

The reply letter contained a warning about the grounds on which a person commits an offence in regard to a direction.

The following are extracts from page 3 of the letter and attachment headed Schedule 1 – Directions

Direction 1

Until Shell Australia Pty Ltd (Shell) has completed the remediation actions in Direction 2(a), 2(b), 2(c), 2(d) and 2(e), NOPSEMA directs Shell not to conduct intrusive activities into plant and equipment where the loss of containment as a result of that intrusive activity could result in risk to the health and safety of persons at or near the facility.

  1. e)  Once Shell has implemented actions a), b), c) and d), Shell senior management are required to attend a meeting with NOPSEMA to present the evidence for the above actions and demonstrate to NOPSEMA that Shell is ready to conduct the intrusive activities prohibited in Direction 1, to the standards described in the revised SMS. If that demonstration is to the satisfaction of NOPSEMA, the restrictions applied under Direction 1 will no longer apply for those whom Shell has demonstrated to be competent under items c) and d).

The following extracts are from page 4


Since September 2019 there have been three notifications of dangerous occurrences at the Prelude FLNG Facility that NOPSEMA inspectors attributed to deficiencies in the aspects of the SMS that relate to the safe isolation of plant and equipment. The first of these occurrences was:

• 18 September 2019: A loss of hydrocarbon containment while preparing the Marine Loading Arm #1 for maintenance. The loss of containment led to the activation of two gas detectors and an Emergency Shutdown (ESD) 2 event. NOPSEMA inspector report 2080, issued on 9 October 2019, describes the details of this event.

The other two notifications of dangerous occurrences at the Prelude FLNG Facility were as follows:

  • 10 December 2019: A work party broke containment into a piece of equipment that contained high pressure liquid and that had not been correctly isolated. Shell attributed the failure to the misidentification of process equipment.
  • 9 January 2020: A loss of hydrocarbon containment prior to breaking process containment to reinstate a relief valve. The release set off gas detectors and led to a General Process Alarm (GPA) and muster at the facility.
  1. In response to the event on 10 December 2019, NOPSEMA began another inspection (2134) to establish whether there was an immediate threat to the health and safety of persons at the facility. While concluding the investigation, the dangerous occurrence on 9 January 2020 occurred. For both events, the inspectors attributed the dangerous occurrences to the deficiencies in the SMS for the safe isolation of plant and equipment, including inadequate descriptions and training for:
    • how to control the venting of flammable hydrocarbon where there is a risk of ignition; and
    • how to identify or tag the equipment to be worked on.However, the inspectors have concerns with multiple aspects of the SMS which may have contributed to these and potentially future, events. The events of late 2019 and early 2020, and the findings from the associated investigations, led the NOPSEMA inspectors to the conclusion that risks associated with conducting intrusive activities at the Prelude FLNG facility, were not being reduced to as low as reasonably practicable, and that there was a significant risk to the health and safety of persons at the facility.


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