Shell sends top HR man to Prelude

09 JULY 2020

SHELL Australia’s top human resources man Adam Ralph has been aboard the Prelude floating LNG vessel some time in an attempt to quell ongoing dissatisfaction, and promising cultural change, Energy News has been told. 

Mechanical and safety issues have exacerbated what some have long called a ‘dysfunctional’ work environment and safety concerns saw production stop and half the staff depart in February.

FULL ARTICLE

By John Donovan

Successive Royal Dutch Shell CEO’s cannot say that they were not warned time and again in chilling terms about the Prelude “experiment”, the description used in a Forbes article published today.

The links below are to a series of articles, initially triggered by a well-placed whistleblower directly involved in the Prelude project. Includes articles by Mr Bill Campbell, the retired distinguished Shell Global Safety Consultant and another retired Shell guru with a track record of spotting potential pitfalls in major Shell projects. read more

A series of recent events highlight the challenge Shell has ahead of it with Prelude, and plans for sister vessels which are supposed to follow.

Tim Treadgold Contributor: Asia: June 23, 2020

The world’s biggest ship is on the way to becoming one of the oil industry’s biggest bloopers.

Prelude, a 600,000-ton monster which is five-times the size of the largest U.S. aircraft carrier, is designed to produce liquefied natural gas (LNG), and other petroleum liquids.

Installed atop a remote gasfield 300 miles off the north-west Australian coast, the 535-yard long Prelude is a bold experiment by the oil major, Royal Dutch Shell. read more

Expert comments received in response to the BoilingCold article by Peter Milne “No winners from Shell’s $US17B Prelude floating LNG”

Comment from retired Shell International Global Safety Consultant, Bill Campbell:

It’s all rather depressing, most worrying aspect as implied in the article is the potential gas supply, or lack of it, from the homogeneous and shared reservoir with another operator bleeding off volumes.

The boilingcold.com.au journalist Peter Milne has given the most detailed analysis yet of the Prelude story, elements of both tragedy and farce.

COMMENT FROM “AN OLD SHELL E&P ENGINEERING SEA DOG”

As before I feel very sorry for the Aussies who are under extreme pressure to get this unit up and running.  I do not quite understand the journalist comment of “gas is running out”.  It is a shared reservoir therefore there will be an agreement for the total volumes in place and a regular review taking place to determine the remaining producible volumes and the agreed volume share for each operator.

The links below are to a series of articles, many triggered by a well-placed whistleblower directly involved in the pioneering Royal Dutch Shell Prelude project. Includes articles by Mr Bill Campbell above, the retired distinguished HSE Group Auditor of Shell International and another retired Shell guru with a track record of spotting potential pitfalls in major Shell projects.

The fears voiced by Bill Campbell about a loss of containment (see article link 3) have proven well-founded.

Ask the Australian National Offshore Petroleum and Environmental Management Authority.

ARTICLE: Voser wisely abandons an unstable ship: 28 December 2013

ARTICLE: Royal Dutch Shell Prelude to disaster?: 10 Jan 2014

ARTICLE: Shell Prelude FLNG: loss of containment of hydrocarbons almost inevitable: 21 Feb 2014

ARTICLE: What should frighten stiff Royal Dutch Shell shareholders: 15 March 2014

ARTICLE: Tales of the Unexpected and Royal Dutch Shell Prelude FLNG: 28 March 2014

ARTICLE: Prelude FLNG: A case of all your eggs in the one basket: 10 July 2014

ARTICLE: Prelude FLNG risks are on par with modern offshore oil and gas facilities say Shell – but are they?: 23 Sept 2014 read more

  Peter Milne: 15 May 2020 • 10 min read

ANALYSIS

Shell’s Prelude floating LNG facility off the WA coast was to be the first of many that would open up stranded gas reserves around the world thanks to the technical and project management prowess of Anglo-Dutch oil and gas giant Shell.It has not turned out that way.When the 488m-long giant arrived in Australia almost three years ago, Shell expected to receive cashflow from the Prelude in 2018.

While the Prelude did export LNG at about half its capacity for the second half of 2019, it is now idle.

Moored far off the Kimberley coast it is plagued with technical problems, dwindling gas reserves and safety processes condemned by the regulator despite Shell and its partners spending about $US19.3 billion ($A30.0 billion) to the end of 2019.

Neither Shell and its partners nor Australia have gained anything near what they expected from the giant experiment. read more

A TALE OF INSPECTORS AND INVESTIGATIONS INVOLVING DANGEROUS OCCURRENCES AT THE PRELUDE FLNG FACILITY (AND THE INTERVENTION OF COVID-19).

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.“ read more

NEWS REPORT: Offshore Alliance claim Shell’s Prelude FLNG thrusters broken

Extract

UNION Members from the Offshore Alliance have claimed Shell’s massive Prelude FLNG vessel offshore Western Australia suffered maintenance issues to two of its thrusters.

RELATED COMMENTS FROM “AN OLD SHELL E&P ENGINEERING SEA DOG”

I am having difficulties understanding why there are such extensive difficulties with the main power plant reliability?

I understand the steam-driven power plant consisting of several boilers supplying steam turbine driven generators of around 100 megawatts, quite a high figure so at least 4 or 5 boilers and generator sets. These boilers are designed to be dual fired using fuel gas or diesel. If gas supply fails, change over to diesel automatically takes place or should do. We know this because LNG was introduced on board to initially cool the LNG storage tanks down and the boil-off would be used as fuel for the boilers saving expensive diesel and reduce harmful emissions. read more

Angela Macdonald-Smith Senior Resources Writer: Feb 6, 2020 — 12.02pm Speculation that Chinese LNG importers could invoke special contractual clauses to avoid purchasing cargoes as demand plunges on the coronavirus epidemic has further stoked worries about the glut in the market that is causing near-record low spot prices.

State-owned companies including China National Offshore Oil Corporation and possibly Sinopec and China National Petroleum Corporation are examining whether they could call “force majeure” on contracts, the Financial Times reported.

Analysts at Houston-based Tellurian noted that Chinese importers have started to divert cargoes to India as they seek to avoid taking such action amid soft demand due to the virus outbreak and a mild winter.

Credit Suisse analyst Saul Kavonic said that the discussion of force majeure seemed “a hypothetical for now” and noted it was unclear in what circumstances such clauses could be invoked. In any case, it would vary from contract to contract. read more

Prelude shutdown

OPERATION of the world’s largest offshore facility, Shell’s embattled Prelude floating LNG vessel, has descended into chaos with back up power generation failing, cardboard potties issued to replace regular toilet facilities and a fleet of helicopters called in to reduce crew numbers.

05 February 2020

Only last week Shell chief executive Ben van Buerden told analysts the Prelude was evidence of how new assets would improve the gas giant’s cash flow in 2020. read more

Reaction to Shell’s temporary shut down of Prelude

The initial reaction from Bill Campbell

Trying to interpret what is going on is difficult because of lack of detail from journalist report so maybe misinterpreting what happened and my interpretation may be misguided, but… evidence if more is needed that something is wrong on this installation. read more

Commodities (Feb 04, 2020 08:09)

By Jessica Jaganathan and Sonali Paul

Production suspended on Feb. 2 -spokeswoman

* Work under way to restore full operations

* Impact on Asian spot prices to be minimal -traders (Adds details)

By Jessica Jaganathan and Sonali Paul

SINGAPORE/MELBOURNE, Feb 4 (Reuters) – Royal Dutch Shell said on Tuesday it has temporarily suspended production at its Prelude floating liquefied natural gas (LNG) facility off northwest Australia following an electrical trip on Feb. 2. read more

PRELUDE COMMENTS FROM “AN OLD SHELL E&P ENGINEERING SEA DOG”

With reference to the published info from Bill regarding the very serious operational shortcomings on the Prelude NGL vessel.

It may be worthwhile publishing the entire notice as if it read by senior people in the Hague central offices there may be a sounding of very loud alarm bells if not there should be as Prelude represents an enormous investment and a leap into the future.  The root cause of these issues requires to be identified and a root and branch analysis of how and why this state of affairs has been allowed to evolve, I believe it is a cumulative pressure from many sources over many months and not just the recent inspections, its much deeper than that. We can only speculate and read with a degree of horror the findings of the Australian Regulator. read more

By Bill Campbell

On 22 January past the Regulator wrote to Shell Australia with a direction, a mandatory notice requiring action by the Owner, because staff on Prelude FLNG were carrying out activities the risks of which were not being reduced to levels as low as reasonably practicable and thus there was a significant risk to the Health and Safety of persons on the facility.

In issuance of this direction, they took cognisance of three previous dangerous occurrences all resulting in a loss of containment, namely read more

Please read in conjunction with the recent comments made by Bill Campbell in the article Alarming warning to the Australian National Offshore Petroleum and Environmental Management Authority about Shell Prelude Project

By Bill Campbell

Hydrocarbon leaks an ever-present danger – the argument with respect to inevitability

HSE started in 1992 to record and classify dangerous occurrences including hydrocarbon releases. This was adopted as their principal technical integrity measure. In the circa quarter of a century from 1992 to 2015, for example, there were 4656 hydrocarbon releases on average 194 per annum. The latest data available is for 2018 where the number of releases was recorded at 96 per annum, so there has been a trend downwards but this should not be understood to be a significant improvement because the population number of installations in 1992 was larger than the number in 2018 due to installations being abandoned at end of life. In any case, the reality is that over the period 1992 to 2015 there was between 3 to 4 hydrocarbon releases per week and in 2018 there was approaching two hydrocarbon releases per week. This can not be viewed as a significant reduction in risk because hydrocarbon loss into the atmosphere, whether it be minor significant or major, are all classified as dangerous occurrences because of the potential of these incidents. read more