Shell’s Prelude FLNG project exec, Rob Jager, to depart
The Shell executive tasked with delivering its $US12bn ($17.5bn)-plus Prelude floating LNG project is set to quit the energy giant.
The Shell executive tasked with delivering its $US12bn ($17.5bn)-plus Prelude floating LNG project is set to quit the energy giant with the gas facility still offline following onboard safety issues.
Shell’s vice-president for Prelude, Rob Jager, will leave in August after just over 18 months in the role and with a string of technical problems delaying a successful restart of the plant.
After a 42-year career with Shell, Mr Jager plans to focus on director positions including an existing board role at Air New Zealand.
However, his departure during a critical period for the facility has surprised some in the gas industry, given his vast experience and broader questions over the outlook for the nascent floating LNG technology.
Mr Jager will be replaced by Stacey Orlandi, currently based at Shell’s headquarters in The Hague as vice-president asset management excellence for integrated gas and new energies.
The floating LNG vessel started delivering supplies from the Prelude gas field, 475km north-northeast of Broome, in June last year.
It was touted by Shell as the first of a revolutionary line of projects to unlock stranded gas resources previously considered too remote to support development of conventional land-based LNG plants.
However, the plant had yet to reach its full capacity of 3.6 million tonnes a year when several safety incidents unfolded in December and January that were probed by the National Offshore Petroleum Safety and Environmental Management Authority.
Just two cargoes were shipped in January before operations were suspended due to the failure of back-up diesel power generation, consultancy EnergyQuest said.
Delays from COVID-19 and technical issues have seen the problem take longer than expected to be resolved, with Nopsema yet to lift its direction notice until the safety changes have been verified.
“The direction remains in force. However, Shell is permitted to restart the affected equipment in order to gather data on the effectiveness of the changes to the safety management system,” a Nopsema spokesman said on Monday. “The verification inspection is a multi-month process where Nopsema will assess the changes, their effectiveness, and then make a decision on whether to lift the direction.”
Prelude had been operating at only 14 per cent of its nameplate capacity, EnergyQuest said.
Shell said it was focused on a gradual resumption and noted the utility systems had been safely restarted with the focus now on restarting gas supply.
Shell’s Australian chairman, Tony Nunan, said it was still “very early” in the life of the Prelude project and it was not working to any specific timeline to resume production.
“When we identify an issue or challenge we work through it methodically. We don’t just solve it for the short term but we get it up and running for the long term,” Mr Nunan told The Australian.
“We have been doing that with Prelude in recent times. We’ve been pleased with the progress that we’ve made in that we have brought the utilities back online and are now looking to a full restart of the hydrocarbon system.”
Shell has pursued Prelude as a new delivery model for the industry where vessels can be rolled out of shipyards and taken to remote sources of gas, operate for several years and then move to another isolated field.
However, there are still doubts among analysts over the cost of the facilities, with Shell never publicly issuing a budget for Prelude.
“Some floating LNG projects’ challenging execution, combined with a lower cost and price landscape leave the appetite to pursue more large-scale FLNG as questionable,” Credit Suisse analyst Saul Kavonic said.