Prelude named in Shell offtake deal

SHELL’S Prelude floating liquefied natural gas project off Western Australia has taken a significant step forward after the company struck its first supply deal for the project.
Prelude named in Shell offtake deal Prelude named in Shell offtake deal Prelude named in Shell offtake deal Prelude named in Shell offtake deal Prelude named in Shell offtake deal

Yesterday, the super-major announced it had signed a binding sale and purchase agreement for the long-term supply of LNG to Japan's Osaka Gas.

Under the deal, Shell will supply 800,000 tonnes of LNG per annum sourced from its global portfolio for 25 years, starting April 2012.

A Shell spokesperson said the deal would include gas from Prelude and the Gorgon project once they come onstream, adding that it was the first time Prelude had been part of a Shell supply deal.

The Prelude FLNG project includes developing the Prelude and Concerto fields in Shell's wholly owned WA-371-P permit.

Prelude has estimated reserves of about 2.5-3.0 trillion cubic feet of gas and about 120 million barrels of condensate, while the super-major has yet to announce reserves for the Concerto find.

A final investment decision for the project is scheduled for early next year with first gas expected in 2016.

The 15MMtpa Gorgon project on Barrow Island, in which Shell has a 25% stake, is planned to come onstream in 2014.

Shell International LNG supply vice president David Wells said the agreement with Osaka represented another milestone in the company's growth of LNG supplies into Japan.

"Japan is a key market for Shell and we are committed to help secure the energy the country needs, now and in the future."

Shell did not disclose the value of the deal.

Osaka Gas had in January signed up to buy 1.5MMtpa of LNG for 20 years from PNG LNG.

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