Shell’s Prelude FLNG becomes a big headache!

By Bill Campbell

According to a recent article in Forbes “the biggest vessel in the world costing todate between 12 and 17 billion US may have also turned into Shell’s biggest blooper.”

It’s all been Technically very challenging as Shell has attempted to squeeze a complex LNG plant into a relatively small space Forbes say. (this website has covered this as a fundamental concern a number of times) – (1)

Goodman Sachs are also of the opinion that when eventually fully operational Prelude, the worlds most expensive LNG project, will only break even in current market conditions at around 20 dollars per a thousand cubic feet. read more

Shell doesn’t expect Prelude FLNG restart before Q3

June 22, 2020, by Mirza Duran

LNG giant Shell is not expecting to restart production at its Prelude FLNG facility offshore Western Australia before the start of the third quarter.

Shell hasn’t exported any cargoes from the FLNG for almost five months following an electrical trip on February 2.

“Start-up timing will depend on Covid-19 constraints and compliance with government directions, which will result in a reduction in the number of people on board the facility”, a Shell spokesperson said in a emailed statement on Monday. 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

By John Donovan

For several years, retired Royal Dutch Shell experts, including Bill Campbell, have rung alarm bells about safety issues in relation to Shell’s Prelude FLNG project. See Royal Dutch Shell Prelude to disaster 

We have also published related information supplied to us by an insider. The person in question has been intimately involved in the project at a high level. He is deeply concerned that warnings issued to Shell (and other parties) have been ignored and that financial considerations are taking priority over safety issues. The whistleblower supplied me with internal information and photographic material. 

Bill Campbell made a chilling assessment: “The revolutionary concept of offshore LNG installations (FLNG) is said to have economic and environmental advantages. A distinct disadvantage however is that the risks to health and safety of persons employed offshore on the LNG FPSO’s, such as Prelude, will be higher, when compared to onshore LNG plants of similar capacity, specifically the potential for loss of life; …loss of containment of hydrocarbons is likely to occur on Prelude during its operational life, either through flaws in the design, human error or failure to inspect and maintain. It’s almost inevitable.  It’s only to be hoped that the consequences of these losses never reach their full potential.”  read more

Protest event in Ireland during “Shell to Sea” campaign

Joe Brennan: 4 Sept 2017: Extracts from article: “Vayu warns of volatile prices for winter gas”

Ireland imports much of its gas needs through the UK, even though the Corrib field off the Mayo coast, which started production in late 2015, has the potential to meet up to 60 per cent of the country’s gas needs and is expected to supply fuel for up to 20 years. Discovered 21 years ago, the field was dogged by years of opposition before natural gas started flowing almost two years ago. FULL ARTICLE read more

By John Donovan

US local newspaper, The Beaver County Times has published several enthusiastic articles welcoming “Shell Chemicals’ $6 billion ethane cracker plant on the banks of the Ohio River” and all of the jobs that will be created.

Shell’s Corrib gas project in Ireland was welcomed on the same understandable basis by most of the Irish population.

There is another similarity; opposition on health and safety grounds to the laying of necessary pipelines.

Shell’s aggressive approach to the relatively few protestors at the beginning of the Corrib project built up resentment and significant determined opposition. Costs escalated out of control  and construction was delayed by a decade. Shell has just  cut its losses by exiting the entire project. read more

By John Donovan

An article we published on 3rd July 2005 warned in relation to the Corrib Gas project in Ireland: “Do we spy another PR disaster on Shell’s horizon…”

I went on to warn:

..there appears to be all of the ingredients present for another Shell PR disaster…

At the 2005 Shell AGM, the then Chairman of Shell Transport and Trading Company Lord Oxburgh, was gung-ho about  jailing land owner opponents of the Corrib gas pipeline, who became known as the Rossport Five. read more

By John Donovan

A Reuters article published today reports that a collapse in the benchmark price of gas has hit Shell’s “long-delayed $12.6 billion Prelude project off northwest Australia”.  Citing Shell Prelude, it says that FLNG projects are being relegated to the backburner.

Shell executive VP Steve Hill is quoted as admitting: “There was maybe an expectation when Prelude was being conceived that this was the future and every LNG project would look like that. I think that got kind of superseded by the U.S. being the primary source of new LNG supply ..” read more

By:  Danny Fortson – The Sunday Times

The Australian investment giant nicknamed the “vampire kangaroo” is hoping to sink its teeth into Ireland’s £3bn Corrib gas field.

Macquarie, one of the largest owners of British infrastructure, is understood to have approached Shell over a deal that could value the FTSE 100 giant’s 45% stake in the project at more than £1bn. It is unclear whether the Australians have tabled a formal bid.

Corrib started producing a year ago after years of delays and protests from fishermen, environmentalists and locals. read more

By John Donovan

Printed below are extracts from a communication received from a Shell Civil Engineer who, until recently, worked on the construction of the ill-fated Kashagan oil field.

He says his dire warnings in regard to construction issues were escalated to Shell top management, including Andy Brown, but were ignored.

He has also raised the subject of Shell depriving sacked workers tax breaks on redundancy pay. A policy he describes as theft.

The same source supplied related, apparently authentic, Shell emails. read more

Kashagan AKA “Cash All Gone”

Forgot the initial cost estimate, probably around $8-10 billion. Now 10+ years too late and ballooned to $50 billion. Most normal companies would have gone bust long ago.

Shell inherited some beauties from the boys of the roaring 90s. I hope someone will write a book one day on this era. 

Reserve crisis, Pearl, Sakhalin, Kashagan, Alaska, tarsands, and I must have forgotten a few. Repeated over-promise and under-delivery. All many billions over budget, extreme overruns in startup, loss in AAA status, removal of operational and technical expertise. I find the silence on Prelude ominous. Probably goes the same way as the others. read more

Links to over 265 articles by a host of publishers including the FT, Wall Street Journal, Reuters, Dow Jones Newswires, Bloomberg, New York Times etc., containing references to this website, or its founders Alfred and John Donovan (photo right).

Includes newspaper and magazine articles, and newsletters. All in date order.

WALL STREET JOURNAL ARTICLE: “Shell Wages Legal Fight Over Web Domain Name”: 2 June 2005

BLOOMBERG ARTICLE: “Shell in Legal Battle Over Name of Web Site, Journal Reports“: 2 June 2005 read more

Gordon Deegan: Thursday, March 31, 2016

Shell Ireland has received a further €50m cash injection from oil giant Shell, as the Irish firm finally generates revenues from the long-delayed and controversial €3.6bn Corrib Gas field.

The increase of €50m in capital at Shell E&P Ireland Ltd is confirmed in new documents lodged with the Companies Office, which show that the authorised share capital at the firm now stands at €1.4bn.

Shell and its Corrib Partners over 2015 and 2014 spent €580m, made up of an investment of €260m last year and €320m in 2014 to bring gas ashore. read more

Shell Corrib firm gets €70m cash injection

Gas began flowing from the field only in the past few weeks – 11 years behind schedule.

By John Mulligan: 4 FEB 2016

Oil giant Shell injected €70m into its Irish unit that’s behind the Corrib gas project in recent months as the field prepared to begin delivering gas, new filings show.

The Corrib gas field is located 83km off Ireland’s west coast in depths of almost 350 metres.

Gas began flowing from the field only in the past few weeks – 11 years behind schedule.

Shell owns a 45pc stake in the Corrib field, with Norway’s Statoil owning 36.5pc. Canadian firm Vermilion owns 18.5pc. read more

Lorna Siggins: 24 JAN 2016

The €3.5 billion Corrib gas development is due to be opened by Minister of State for Natural Resources Joe McHugh on Monday, almost 20 years after the gas discovery was reported off the north Mayo coast.

Taoiseach Enda Kenny had been earmarked for the invitation-only event, but will be at Downing Street in London. Corrib shareholders Shell, Statoil and Vermillion are hosting a plaque unveiling and lunch in Belmullet, almost 15km from the gas refinery.

While much of the town’s focus is currently on sale of the €13.7 million winning Lotto ticket in Carey’s newsagent, the project opening represents a significant milestone. read more

…many of those involved have been ridiculed, slandered, spied on, harassed, beaten and jailed – all for upholding their democratic right to peaceful dissent. Incidents included the 2005 jailing of the Rossport Five, who spent 94 days in prison at the behest of Shell.

Ruairí McKiernan

As gas is flared into the skies above north Mayo, it is worth reflecting on a project that has been one of modern Ireland’s greatest scandals, a stunning fiasco in planning, economics, environmental protection and the abuse of civil liberties.

Far from it being just about energy supply, jobs and development, the Corrib gas project cuts to the core of this republic and asks big questions about how the country is run.

For more than 10 years now, campaigners have attempted to highlight the project’s many flaws. read more