Energy
Liquefied Natural Gas

Shell attracts vassals with world's biggest vessel

Burgess COMMENTARY

Peter Burgess

Shell attracts vassals with world's biggest vessel V
The 488-meter-long hull of Shell's Prelude liquefied natural gas facility is floated out of its dry dock in Geoje, South Korea.

FRANKFURT, Germany -- It is longer than New York's Empire State Building, high and large enough to house four soccer fields. And it is heading out to sea.

Royal Dutch Shell is luring more and more partners around the world into liquefied natural gas development projects with its advanced and gargantuan floating facilities.

Shell recently floated a 488-meter-long hull for world's largest floating facility. Built by Samsung Heavy Industries in Geoje, South Korea, the Prelude 'ship' will be launched in 2017 in seas off northwestern Australia.

The base structure is a prelude for a floating LNG station that will house storage tanks capable of holding up to 175 Olympic-size swimming pools of fuel.

The structure will head Down Under after being fitted with a superstructure built by leading French engineering company Technip.

Sharing

Shell is also supplying technology to competitors. Australia's Woodside Petroleum, which will operate the Browse Joint Venture facility, in September announced that participants will use Shell's floating LNG technology to commercialize its three gas fields.

Floating LNG technology's biggest appeal is lower cost. It is cheaper to operate facilities at sea than on land, because low-cost labor from around the world can be brought in as Australian payrolls continue to rise. Shell made a decision in May 2011 to focus on floating gas facilities. The Anglo-Dutch company that year acquired a 30% stake in Japanese company Inpex's Abadi's gas field project in eastern Indonesia. It aims to give marketing advice to the Japanese company with technical knowledge only Shell can offer.

U.S. rival Exxon Mobil applied in spring for permission to develop LNG off the coast of Western Australia. Exxon's project, which is expected to produce 6 million tons of gas per year, is slated to be completed by around 2020.