Shell focused on turning around troubled Australian operations

By Sonali Paul: September 15, 2020

MELBOURNE (Reuters) – Undaunted by hefty writedowns on its Australian gas assets, Royal Dutch Shell RDSa.L sees its liquefied natural gas business and “new energy” acquisitions Down Under as core to its long term plans, the Australian unit’s chairman said on Tuesday.

As Europe’s biggest oil company aims for net zero emissions from its operations by 2050 and plans a major restructuring, Shell still sees gas as a crucial part of the puzzle, with around a quarter of its gas assets in Australia. read more

Shell Resumes Work at Prelude Floating LNG Facility

Royal Dutch Shell plc RDS.A recently confirmed that it resumed activities at Prelude floating liquefied natural gas (LNG) facility offshore Western Australia. The facility remained offline since February due to engineering glitches. This suspension followed an order from Australia’s upstream regulator to perform additional work following three safety incidents that took place at the facility between September and January.

The closure of the Prelude plant depressed Australia’s LNG export volumes, which further took a hit from an extended shutdown of Train 2 at the Chevron Corporation CVX-regulated Gorgon LNG site due to technical snags stemming from fractured heat exchangers. read more

Australia’s $200 Billion LNG Boom Waylaid by Covid and Cracks

James Thornhill Sep 05 2020, 3:30 AM Sep 07 2020, 9:24 AM

EXTRACTS

(Bloomberg) — Cooks on strike and cracked equipment are among the latest maladies to undermine Australia’s $200 billion push to become the world’s biggest liquefied natural gas exporter.

More than a year after the completion of a decade-long LNG construction boom, two of the seven marquee projects haven’t been able to work right, the nation’s east coast urban centers face an impending gas shortage blamed partly on exports, and the government is receiving relatively meager tax revenues from fuel sales. read more

Shell Australia attempts to bring Prelude FLNG back online

Paul Hunt: Senior Journalist: Oil & Gas, Policy. 07 Sept 2020

“The process for hydrocarbon restart of Shell’s FLNG facility has commenced,” a Shell Australia spokesperson told Energy News on Friday.

“Once we have safely started up, we will be in a stronger position to talk about timing of production and cargo.”

However, according to one source on board the vessel the restart had some issues with “multiple trips” of the plant and two swivels inside the turret that moors the giant LNG facility in place. read more

Shell begins restart activity at Prelude FLNG

Published 04 Sept 2020

Shell has begun restart operations at its 3.6mn t/yr Prelude floating LNG (FLNG) facility offshore Western Australia (WA), which has been off line since February. But it has yet to define the timeline for when production will resume.

“The process for hydrocarbon restart of Shell’s Prelude FLNG facility has commenced,” a Shell spokeswoman said. “Once we have safely started up, we will be in a stronger position to talk about timing of production and cargo.” read more

Coronavirus Further Complicates Shell’s Giant Floating Gas Project

The $15 billion Prelude vessel highlights how Covid-19 is hindering operations and challenging the economics of energy megaprojects

Royal Dutch Shell PLC spent billions of dollars developing one of the world’s most challenging energy projects, a floating gas terminal five football fields long. The coronavirus pandemic is posing a new problem: How to get workers to safely start it back up.

After years of delays, cost overruns, technical problems and safety concerns, Shell began exporting natural gas from the enormous vessel, known as Prelude, last year off the coast of Australia. But production was halted in February because of an electrical fault. Efforts to restart are now being slowed by social-distancing requirements, the company said. read more

World’s largest floating LNG factory remains in shutdown — at just three years old

More than five times larger than the world’s biggest aircraft carrier, Prelude is the largest floating object ever built. (Supplied: Shell)

ABC Kimberley

Shell’s massive floating LNG factory off the Kimberley coast has been in shutdown since February and industry analysts are divided on whether the $12-17 billion facility has a future.

Prelude FLNG is the largest floating object ever built and billed as the solution to getting gas out of Australia’s most remote undersea gas fields. read more

Paul Hunt: Senior Journalist: Oil & Gas, Policy. 07 August 2020

Currently FIFO staff work three weeks on, four weeks off, then three weeks on and five weeks off but under the new proposed agreement, employees would simply do a four week on, four week off roster.

In a power-point presentation leaked to Energy News this week, Shell Australia said a new roster was needed due to interstate travel restrictions, and the combined impact of a 14-day quarantine requirement for FIFO staff.

“This is placing significant pressure and strain on Prelude FLNG production team resourcing, as well as work-life balance for all personnel,” Shell said in its proposal to its employees. read more

 by Allister Thomas: 30/07/2020, 7:55 am Updated: 30/07/2020, 8:26 am

Shell has posted losses of $18.1billion (£14bn) for the second quarter of 2020 as oil, LNG and gas prices remain depressed.

The energy major took an impairment charge of $16.8billion (£12.9bn) – $22.3bn pre-tax (£17.2bn) -as it wrote down the valuation of assets due to the downturn and Covid-19.

Shell’s second quarter results compare to a profit of $3.1bn (£2.39bn) in the same period last year,  while revenues have dropped to $32.5bn, compared to $60bn in Q1 2020 and $90.5bn Q2 2019. read more

Sodexo to chopper ‘scabs’ in preparation for union strike

28 July 2020

Lego model of the Prelude FLNG at Shell House on Wellington Street, Perth.

CONTRACTOR Sodexo has made a last-ditch effort to prevent the impact of a union strike across Shell Australia’s Prelude floating LNG vessel offshore Western Australia, by helicoptering in alternative staff ahead of the protected action set to commence on Thursday.

The Australian Workers Union and Maritime Union of Australia, in a coalition known as the Offshore Alliance, have organised a strike, more commonly known as a ‘protected action’ when undertaken as part of enterprise bargaining, from this Thursday, of more than 60 caters, cooks, and cleaners across the Prelude FLNG. read more

Workforce strike at Shell’s Prelude confirmed

Paul Hunt: Senior Journalist: Oil & Gas, Policy. 21 July 2020

In a statement provided to Energy News today, union officials said that members had voted unanimously to take protected action at the giant FLNG after negotiations with a key contractor turned sour.

Protected action allows the union members to strike without legal consequences and is often a ‘last resort’ effort to negotiating worker rights.

Union members will not work between 4am and 7am or between 4pm and 7pm. Further to this no hot food will be cooked and no meat will be prepared. There will also be no baking and no laundry services “until further notice”. read more

By Irina Slav – Jul 15, 2020, 3:00 PM CDT

It was the last of the large LNG projects that put Australia in the lead for global LNG exports. It was the biggest jewel in Shell’s LNG crown. But this jewel hasn’t produced any LNG since February, and its future is unclear.

The Prelude floating liquefied natural gas project, with an annual capacity of 3.6 million tons, began shipping LNG last June. The first cargo shipped more than eight years after the final investment decision was made, and two years after the FLNG vessel arrived at the site, one Wood Mac analyst pointed out at the time. In February this year, production was stopped following a technical problem. read more

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

If the unions are correct and Shell did intervene in negotiations, those actions would be considered unlawful. 

Shell has refuted the accusations. Shell upholds the highest standards of business ethics and complies with our legal obligations. In everything we do we act fairly, honestly and transparently,” a Shell spokesperson told Energy News this morning. 

Unions threaten strike at Australian offshore platforms

Paul Hunt: Senior Journalist: Oil & Gas, Policy.

Sources, speaking exclusively to Energy News, said the unions expected to receive a Protected Action Ballot Order from the Fair Work Commission imminently. read more

Published date: 03 July 2020

Australia bore the brunt of Shell’s $22bn impairment charge this week, with the write-down reflecting its expansion into unconventional gas and pioneering floating LNG (FLNG) technology with the 3.6mn t/yr Prelude venture.

Shell said it will write down the value of its Australian gas assets by between $8bn-9bn, with up to 40pc of its asset impairment from Australia.

Along with Prelude, the other Australian asset to see its value cut was Shell’s upstream coal bed-methane (CBM) gas fields that provide feedstock for the 8.5mn t/yr Queensland Curtis LNG (QCLNG), which it bought through the £47bn ($58.6bn) purchase of UK energy firm BG Group in 2015. read more

One of the most eye-catching impairments Royal Dutch Shell announced yesterday was of its Prelude floating liquefied natural gas (LNG) project off Australia.

The huge project is one of the largest causes of the $8 billion to $9 billion of writedowns Shell warned it would make in its “integrated gas” division, and highlights the changes that have rocked the energy market in the past decade.

When the Anglo-Dutch group approved Prelude in 2011, it claimed the “revolutionary” development would be “a game-changer for the energy industry”. read more